AN EXAMINATION OF OUTSOURCED MARKETING

IN DIVISION I INTERCOLLEGIATE ATHLETICS

by

ROBERT HUMPHREYS ZULLO

(Under the direction of Billy Hawkins)

ABSTRACT

The purpose of this study was to examine the outsourced sports marketing relationship

between select Division I National Collegiate Athletic Association athletic departments and their

outsourced marketing partner as examined from the perspective of the latter. Twenty-eight of

the 61 companies selected to participate in this study responded to the questionnaire. Data was

collected as descriptive statistics and frequencies were analyzed along with qualitative responses.

Outsourced companies focus on sales efforts at a highly successful rate in an effort to

generate revenue. The main inventories sold include commercials during radio broadcasts of

games and signage at athletic facilities. These are typically packaged with the sports of football

and/or men’s basketball while other sports are ignored due to a low financial return on

investment. It is suggested that future sponsorships package Olympic Sports and women’s

athletics with the revenue sports to best meet the mission and philosophy of institutions of higher

education.

With regards to Title IX, outsourced marketing companies felt that athletic departments

should assume the greater responsibility in adhering to federal legislation. The companies

provide the revenue, but the departments decide how it should best be spent. Results also

indicate that outsourced companies have limited numbers of females and minorities in sales

positions. Recommendations have been made to make advancements.

For better long-term growth, outsourced marketing companies are advised to expand

inventory options for corporate partners. Research also found that many sponsorship categories

remained unfulfilled in intercollegiate athletics. However, sponsorships have been filled in the

frequently restricted categories of alcohol and gambling. It is advised that they should continue

with initial approval from the institutions of higher education and continuous evaluations.

Companies would also be advised to work with sport management programs at the schools to

better demonstrate a return of investment to their sponsors.

Outsourced companies seek new business opportunities for the future with athletic

departments, though the most likely would involve working on athletic facility naming rights.

Such future ventures and continuous sales efforts are likely to focus on select Division I schools

and conferences most capable of demonstrating a larger financial return on investment.

INDEX WORDS: Outsourced Marketing, Sports Marketing, Intercollegiate Athletics,

NCAA, Division I-A, Sponsorships, Corporate Sponsors

AN EXAMINATION OF OUTSOURCED MARKETING

IN DIVISION I INTERCOLLEGIATE ATHLETICS

by

ROBERT HUMPHREYS ZULLO

B.A., University of Virginia, 1997

M.A., University of North Carolina, 2001

A Dissertation Submitted to the Graduate Faculty of The University of Georgia in Partial

Fulfillment of the Requirements for the Degree

DOCTOR OF PHILOSOPHY

ATHENS, GEORGIA

2005

© 2005

Robert Humphreys Zullo

All Rights Reserved

AN EXAMINATION OF OUTSOURCED MARKETING

IN DIVISION I INTERCOLLEGIATE ATHLETICS

by

ROBERT HUMPHREYS ZULLO

Approved:

Major Professor: Billy Hawkins

Committee: Dawn Bennett-Alexander Rose Chepyator-Thomson Mel Hill

Electronic Version Approved: Maureen Grasso Dean of Graduate School The University of Georgia August 2005

DEDICATION

To my bride

KATHARINE MCKENZIE HANES ZULLO

I came to Athens, Georgia, in search of my PhD and the opportunity to work in the

premier intercollegiate athletic association in the nation. I ended up meeting someone that I

wanted to spend the rest of my days with and appropriately met her at Sanford Stadium. Thank

you for your love and support during this time as each day is simply better being married to you.

iv

ACKNOWLEDGEMENTS

Many people need be recognized for their part in making this dream of a doctorate degree

a reality. It has been a challenge, but when faced with a challenge one can either cower or rise

up and seize the opportunity, embracing the moment. This journey has been full of wonderful

and rewarding moments.

I first need to recognize my committee of Dr. Sarah Fields, Professor Mel Hill, Dr. Dawn

Bennett-Alexander, Dr. Rose Chepyator-Thomson and Dr. Gary Green, each of whom will

continue to have a significant impact on my pursuit of excellence in higher education long after

the final defense. Chairing the committee, Dr. Billy Hawkins earns a significant mention for his

grace, guidance and leadership in my time in Athens. It has been an absolute pleasure.

Within the Department of Kinesiology, I also need to recognize Department Head Dr.

Kirk Cureton and Graduate Coordinator Dr. Ted Baumgartner for their support as I finished up

my dissertation and for affording me such a extraordinary opportunity to teach in the Sport

Studies program. I also need to thank Marlee Stewart for keeping all in order as the Department

underwent and continues to undergo its transformation. Thanks also to Melinda Dalton who is

the new third floor torch bearer and one that I am confident will do many great things for Sports

Studies. Within the Graduate School, Regina Adams and her colleagues need to be thanked for

their help in making sure the little things were done properly and crossed off the “to-do” list.

And from Chapel Hill, I need to recognize Drs. Osborne, Billing, Mueller and the “Old Pro” Ron

Hyatt for their initial guidance in the administering of my education of intercollegiate athletics.

v

Leaving Virginia Tech was a tough proposition, but the move to Athens and the

opportunity to work for the University of Georgia Athletic Association was one that made the

transition worthwhile. Working first with stellar individuals like Kelley Barks, Loran Smith and

Virna Mendoza and then the likes of Alan Thomas, Claude Felton and Vince Dooley has been an

absolute educational treat. I especially need to thank Frank Crumley and Damon Evans, as from

you two I have learned so much about sports and life away from the business. Beat Boise State

for me and TRULY make UGAA a “model of excellence for others to emulate” for years to

come. Thank you for the privilege and honor of working at the UGAA as I truly appreciated

becoming a “Bulldawg.” I could not ask for two finer mentors in intercollegiate athletics.

I also need to thank my close friends and “brothers” for their support during this process.

Scott Poveromo, Brian Wilson, Jim Thompson, and my band of fellow Tar Heels John Mark

Adkison, Jim Ervin and Eric Roedl each provided continuous and necessary encouragement

along the way that was more valuable than they could ever imagine. Major shout-outs also need

to go to Rebecca Hubbard, Brian Moore and Braxton Snyder. Without these Bulldogs at my

side, Sport Studies and life in general would not be nearly as much fun. Bueno!

Most importantly, I need to thank my family for their unremitting love and support. To my

in-laws in Atlanta, much love and thanks for your warmth and open arms. To my sister Jessica

and my brother Nick, you guys are continuously sources of my fondest memories and endless

laughter. To my grandparents, Mrs. Rosaria Zullo and Dr. and Mrs. Robert H. Gruver, thank you

for your eternal love and guidance. I also look forward to our visits and hate bringing good

times to a close when we must part. Many thanks to my cousins and aunts and uncles,

particularly Susie and Steve Russell. No Roll Tide in this Peach State! And to my late Uncle

Bob, thanks for teaching me that a simple life is a good life. Spending your time with the ones

vi

you enjoy most truly should be a priority. I hope you are teaching others the fine skill of putting

in a better place today as you provided the fondest sports moment possible at the Tournament of

Aces in God’s country.

And to my parents who have simply put, been the two people that I, without a doubt, hope

to emulate the most in my life. Katharine and I truly love and value you all for all that you are.

Thank you for being our parents and such wonderful friends. I love you guys and cannot say

thank you enough for all that you have done in my life. All of my successes are achieved

because of you two.

Finally, I need to thank the undergraduate and graduate students in the Sport Studies

programs at the University of Georgia. Working with you all has been absolutely inspiring and a

pleasure on a daily basis. Do not forget me for tickets when you are big time and remember your

peers for job opportunities! Go Dawgs!

vii

TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS……………………………………………………………………v LIST OF APPENDICES……………………………………………………………………….xi CHAPTER

1 INTRODUCTION…………………………………………………………………1 Statement of the Problem……………………………………………………...10 Research Questions……………………………………………………………10 Definition of Terms……………………………………………………………12 Limitations of the Study……………………………………………………….15 Delimitations of the Study……………………………………………………..16

2 REVIEW OF LITERATURE……………………………………………………...17

Outsourcing in Higher Education……………………………………………...17 Higher Education Concerns of Commercialization in Intercollegiate Athletics Sports…………………………………………………………………………..21 Corporate Sponsorships in Intercollegiate Athletics…………………………..24 Concerns with Sponsorships in Intercollegiate Athletics……………………...26 Restrictions on Sponsorships in Intercollegiate Athletics……………………..28 An Overview of Outsourced Marketing……………………………………….36 Schools and Outsourced Marketing Relationships…………………………….44 Concerns in Outsourced Marketing……………………………………………47

viii

Title IX Implications on Outsourced Marketing………………………………..49 Future Trends in Outsourced Relationships…………….…………….………...51 Potential Outsourced Marketing Ventures……………….…………….……….52 Where Does It Stop…..........................................................................................59

3 METHODOLOGY…………………………………………….…………….……..61

Design of Study……………………………………………….………….…….61 Selection of Participants…………………………………………………..……62 Data Collection……………………………………………………………..…..63 Procedures…………………………………………………………………..….64 Statistical Analysis…………………………………………………………..…65

4 RESULTS AND OBSERVATIONS……………………………………………....66

Demographics…………………………………………………………….........66 Staffing and Sociological Implications………………………………….…….68 Sales Efforts and Motives……………………………………………….…….70 Duration of Relationship and Success Rates…………………………….……71 Creativity and Marketing Trends………………………………………...........72 What Inventory Sells…………………………………………………….……73 Restricted Corporate Sponsorships……………………………………….…..78 Current Trends and Issues in Outsourced Marketing…………………….…...80 Public vs. Private Debate………………………………………………….…..82 Expense Reductions in Outsourced Efforts………………………….………..83 What Sports Sell, What Sports are Ignored………………………….……......84 Title IX and Outsourced Marketing…………………………………..……….86

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Strengths and Weaknesses of Outsourced Marketing…………………..………88 Future Problems, Best Fit Issue and High School Athletics……..……………..90 Level of Satisfaction, Renewal Interest and Familiarity…………..……………92

5 CONCLUSION AND RECOMMENDATIONS……………………...……………93

Complimenting Literature………………………………………….…………103 Direct Practical Recommendations………………………………….………..104

REFERENCES……………………………………………………………………….………111 APPENDICES……………………………………………………………………….……….126

A. COVER LETTER……………………………………………………….…….….126

B. CONSENT FORM……………………………………………………….………128

C. QUESTIONNAIRE……………………………………………………….……..130

x

LIST OF APPENDICES

Page

Appendix A Cover Letter……………………………………………………………………126

Appendix B Consent Form…………………………………………………………………..128

Appendix C Questionnaire…………………………………………………………………..130

xi

CHAPTER ONE

INTRODUCTION

In 1989, Dr. William Friday, former president of the University of North Carolina, met

with other university and collegiate presidents from around the nation to discuss the growing

problems with intercollegiate athletics. The group expressed their concerns about reoccurring

detrimental trends and decided to form a task force to suggest recommendations for reforming

college sports and its role in higher education. The group is today known as the Knight

Foundation Commission on Intercollegiate Athletics deriving its name from grant funding

received from the Knight Foundation. This group has been a major advocate for keeping college

sports from becoming too much like its professional counterparts (Knight Commission, 2005).

Subsequent and smaller advocate groups such as the Drake Group (Yaffe, 2005) and Coalition

on Intercollegiate Athletics (Miller, 2005), both consisting of faculty members, have followed

the Knight Commission’s lead in trying to reform the problem areas of college sports.

In examining intercollegiate athletics in its initial report in 1991, the Knight Commission

found that the woes of college sports could consistently be traced back to three glaring concerns:

certification, academic integrity, and financial integrity, all of which they recommended, should

fall under greater presidential control (Knight Commission, 1991). Ten years later, the

Foundation, in issuing a follow-up report, found that the three main concerns were the arms race,

academics and commercialization (Knight Commission, 2001).

The arms race is a reference to the escalating cost of coaches’ salaries particularly in the

sports of football and men’s basketball. It also refers to the competition among schools to have

1

the best athletic facilities with such amenities as indoor football practice facilities or the finest

players’ lounges with specific attention to luxury detail and square footage. This is done in the

interest of impressing high school recruits who would consider playing college athletics for the

school. Though many of the facility upgrades are funded by private sources, it has turned into a

continuing competition amongst schools to see who has the best weight room, locker rooms,

methods of transportation and other assets that are particularly devoted to football and men’s

basketball. Fortunately, recent years have seen an increase in the attention paid to the student-

athlete academic facilities, as schools including Auburn University, the University of Georgia,

the University of Utah, Louisiana State University, Western Kentucky University, Texas A&M

University, Northern Illinois University and the University of Tennessee have built or are

constructing impressive academic centers. At the same time, Michigan is spending up to $200

million (Wisely, 2005) upgrading its football stadium to include 79 new suites while Michigan

State adds 24 suites and 830 club seats at the cost of $61 million. Wisely notes that since 2000,

eight Big Ten Schools have added premium seating to their football stadiums at the expense of

$816.3 million. Georgia also added 27 new suites on the north side of its stadium in recent years

for $25 million (Floyd, 2004) after initially finishing 20 suites for $12.8 million on the south side

(Stroer, 1999). The south side has 50 suites total as the original 30 suites on the south side at

Sanford Stadium costs $6 million to build in 1994.

While the Knight Commission would like to address this concern of the “arms race”

amongst schools, it is truly limited to the power of persuasion to implement change in this

particular area. It is difficult to cap coaches’ salaries or spending on certain sports due to the

legal mandates associated with antitrust. A previous attempt by the NCAA to limit basketball

coaches’ salaries in the 1980’s resulted in a $67 million loss when the courts found the NCAA to

2

be in violation of the Sherman Antitrust Act (Hawes, 1999). For the coaches who are earning in

excess of $1 or $2 million annually, they are merely being paid what the market is offering. Fair

market value is what leads the University of Tennessee to pay its football coach Phillip Fulmer

over $1.78 million annually or Florida State University paying Bobby Bowden $2 million each

season, up from $35,000 in 1976 (Drape, 2004). Fulmer will earn $2.05 million this fall joining

five other college football head coaches who earn more than $2 million per season (Associated

Press, 2005b).

Many critics find these salaries to be astoundingly high particularly if the coaches earn

more than faculty or the school’s president. However, market value dictates that if a coach like

Oklahoma’s Bob Stoops is making over $1 million annually and another school tries to lure him

away with an offer of $2 million, Oklahoma has to evaluate its return on investment in retaining

the coach at an increased salary. For the Sooners, research found that retaining Stoops at a salary

in excess of $2 million was a good financial investment relative to hiring a new coach (Wieberg,

2005). It becomes an arms race to hold on to the coach that provides your athletic department

the greatest return on investment, even if that means driving up the market value of salaries.

Wieberg indicated that the football program brought in revenue of $34 million in the 2003-2004

season annually or 57 percent of Oklahoma’s overall athletic budget. Stoops will earn $2.4

million for the 2005 season, exclusive of additional incentive bonuses that could result in his

earning $2.66 million for the year (Associated Press, 2005a).

Along similar lines, when private funding is being used to build new athletic facilities,

donors frequently earmark their contributions for a specific project of their favorite sport. They

“restrict” their contribution for that project and that project only. Critics would argue that one

could persuade the donors to spend money in other areas such as women’s athletics, but when a

3

donor’s motivation is to enhance their favorite sport of football or men’s basketball, it is difficult

to convince him to change his mind. Oklahoma athletic director Joe Castiglione indicated that

with respect to the focus on football and men’s basketball,

I know, from afar, it’s hard to understand why universities make a certain

decision. But they have to evaluate their situation and how much a sport or an

individual leading that sport means to the program and the schools – if not the

state. Many times it’s hard to quantify (D1, Wieberg, 2001).

The goal of the donor is to help the school remain among the nation’s elite in that sport and he

does not want to see his school be left behind in the evolution of facilities. Doing so, in his

mind, would lessen the chance that recruits would play for his school.

Furthermore, prior research has demonstrated that donations tend to be earmarked for an

athletic department’s revenue sports as assisting those particular sports is more significant in the

donor’s motive than helping non-revenue sports or women’s athletics (Mahony, Gladden &

Funk, 2003). Such a targeted contribution gives the donor an “in” with the athletic department

leaders and endorses a sense of “power” or “privilege” with regard to significant athletic

department decisions (Staurowsky, Parkhouse & Sachs, 1996). Hence one can see that the

Knight Commission really has limited control when it comes to the issue of the “arms race”

amongst schools, unless colleges and universities were to earn exemption in the future from

antitrust laws.

While the issue of the arms race is still of significant concern, the second glaring concern

of the Knight Commission, that being “academics,” has seen major reforms implemented in

recent years, but particularly in the last 12 months. The NCAA first came out with new

legislation in August 2003 that required entering freshmen student-athletes to be making

4

satisfactory progress each year towards their graduation rates with what is called the “40-60-80”

rule (Lederman & Suggs, 2002). Students have to have completed 40 percent of the degree

requirements by the start of the junior year, 60 percent by the start of the senior and 80 percent

by the start of the fifth year, otherwise they can not compete athletically. This is up from the

“25-50-75” standards in the past.

This slight change forced athletic departments’ academic support services to make sure

that student-athletes were taking courses required for graduation and not just classes to keep

them eligible to compete. It also makes it harder for students to transfer to Division I schools

from a two-year or junior college because now transfers are held to similar “40-60-80” standards

(Nagel, 2003). These student-athletes tend to be those that were not admitted to the Division I

schools the first time around due to academic shortcomings in high schools. While the new

guidelines helped to make some strides in prioritizing education, this new rule still did not

address the issue of whether coaches were recruiting high school students that might be

academically ill-prepared for that particular school. Ultimately, there was punishment for the

student-athlete who struggled academically, including lost eligibility, but not for the head coach.

That was addressed significantly in the spring of 2005.

In the past, athletic directors would frequently release their student-athletes’ graduation

rate as a measure of how they were performing in the classroom relative to the rest of the student

body. Many used the graduation rate of the school’s student body as the mark they wished to

attain with regard to its student-athletes. It should be noted that the compilation of graduation

rates of the student-athletes in the past were not without flaws. If a student-athlete who was

eligible and making satisfactory progress towards graduation decided to transfer, maybe for more

playing time at another school or to be closer to home, it could only hurt the initial school’s

5

graduation rate. This was true even if the student-athlete graduated from college in four years.

In a similar fashion, if a student-athlete decided to go to the professional ranks of the NBA or the

NFL and came back to graduate a few years later, the graduation rate would not reflect that

delayed graduation either.

To offset these issues as well as the concerns that some student-athletes were just taking

classes to stay eligible and not to pursue a degree, the NCAA came up with a new form of

academic measurement. The “APR” score or Academic Progress Rate is a new and improved

indicator of whether students are making satisfactory progress toward their graduation rate and

maintaining eligibility (Brown, 2005). The score is based on two parts, retention of the student-

athlete and the student-athlete’s eligibility status. Hence, a student-athlete who transfers to

another school or goes to the professional ranks does not hurt a school’s APR score significantly

if he/she was on track to graduate. The APR score insures that the schools did its part in the

academic development of the student-athlete. For schools that have a poor APR score, there is

the punishment of lost scholarships for that particular team, arguably the harshest sanction the

NCAA has implemented in years. The retention part of the equation will insure that coaches are

motivated to better recruit true student-athletes that plan on staying through the course of

graduating in four or five years instead of departing after a season or two. Because of the

development of the new APR equation and the “40-60-80” progress check, the Knight

Commission has been pleased by the improved attention given to its academic concerns

(Darlington, 2005b).

The final concern by the Knight Commission is the one that is going to be addressed in

this research. It is the issue of “commercialization” in college sports with regard to corporate

partners such as Nike or Coca-Cola using student-athletes as walking billboards. There is also

6

the concern of television having too great of an impact in intercollegiate athletics (Knight

Commission, 2001). Examples of this would include ESPN broadcasting mid-week football

games or CBS Sports having a billion dollar television contract to broadcast the NCAA Men’s

Basketball Tournament while student-athletes competing in the event are not paid.

This study focuses specifically on the area of “commercialization” with regard to the idea

of schools having corporate partners such as State Farm, Burger King or Verizon Wireless.

Corporate partners help the athletic department earn additional revenue in exchange for

advertising at the sporting events. Some schools are able to handle its corporate partnerships

with in-house marketing departments. However, the growing trend for major Division I-A

schools is to outsource its marketing efforts to an outsourced marketing company that specializes

in the sales of inventory such as commercials on the radio broadcasts or coaches’ television

show, corporate hospitality at home sporting events, signage at athletic facilities and more

(Zullo, 2000).

Unpublished research by the author in 2000 found that the main outsourced marketing

companies were Host Communications, International Sports Properties (ISP Sports) and

Learfield Communications (Zullo, 2000). At that time, Nelligan Sports was an emerging

outsourced marketing company based out of the Northeast. The study also found that of those

schools that were partnering with an outsourced marketing company, the outsourced company

was expected to handle sales while the in-house marketing department shifted its attention to

promotions and increasing attendance and ticket sales. The outsourced company would maintain

a “property” at the school with the property serving as an extension of the parent company. The

property was responsible for the sales efforts and reporting back to the parent company.

7

The author found that the benefits of the outsourced marketing partnership are that of

guaranteed and additional revenue (as cited in Johnson, K., 2005). An outsourced marketing

company will promise a financial guarantee of a set amount to the school’s athletic department in

exchange for being able to sell the “rights” of that athletic department. The rights could be in the

form of a radio commercial, an on-field promotion, a giveaway at a sporting event, or signage at

an athletic facility including on a videoboard.

To a lesser extent, outsourced companies will also sell advertising in game programs, on

ticket backs and on the athletic department’s website. A fan might pick up a schedule poster and

schedule card at a football game with a sponsor’s logo on it. That sponsor may also have a

permanent sign at the football stadium visible to fans and may also host a corporate village for its

clients prior to the game. In exchange for its advertising opportunities, the sponsor will pay the

outsourced marketing company an agreed upon amount of money. The outsourced marketing

company will then put that revenue towards the promised guarantee for the athletic department.

Once the guarantee is met, the athletic department gets an agreed upon percentage of any future

revenue, but it is there that the outsourced company earns its greatest financial sales commission.

The University of North Carolina’s athletic department has a relationship with Learfield

that guarantees the Tar Heels $2.5 million on an annual basis through 2011 (Lee, 2004i). Any of

the net revenue beyond $2.5 million will be split between Learfield and the athletic department.

Hence, if the men’s basketball team wins a national championship and sponsors want to be

associated with the Tar Heels for the upcoming season, the revenue can easily surpass the $2.5

million guarantee. On the opposite side, if the men’s basketball team were to be involved in a

scandal that scares away sponsors, the athletic department would still reap the benefits of at least

the $2.5 million guarantee. It is the notion of “reward for risk” for the outsourced marketing

8

company. The outsourced company assumes the risk in offering a guarantee to the athletic

department, but it can also earn a hefty reward based on its sales record. Because of this

philosophy, outsourced marketing companies frequently pursue relationships with Division I-A

schools that offer the greatest rate of financial return. For example, examining their websites

reveals that ISP Sports works with Virginia Tech, Syracuse, Pittsburgh, UCLA and other “big-

time” schools in Division I-A intercollegiate athletics while Host Communications retains the

rights to Michigan, Arizona, Kentucky and others.

A handful of the “big-time” schools may still choose to keep their marketing efforts

completely in-house such as the Universities of Nebraska, Connecticut and Southern California.

A few other schools, such as Ohio State and Notre Dame, may have multiple outsourced partners

handling its sales. However, various news reports have indicated that 2005 will see such major

athletic departments as UCLA, Pittsburgh, California-Berkeley, and Louisiana State University

commence an outsourced marketing relationship for the first time (Young, 2005, Gautreau, 2005

& “Coast to Coast,” 2004b).

As these outsourced marketing companies gain more schools under their watch, they

spread their sales territory and can start to package a few schools with one corporate sponsor.

For example, ISP Sports may approach Verizon about a national sponsorship deal that could

reach the Northeast through sponsoring Syracuse University, the West Coast through sponsoring

UCLA, the Midwest through sponsoring the University of Houston and the Southeast through a

sponsorship of Georgia Tech Athletics. At the same time, Verizon may also discuss a similar

deal with Host Communications through sponsoring the athletic departments at Texas, Boston

College, Arizona, Kentucky and the University of Michigan. Through selection of the right

9

schools around the country, the outsourced marketing companies are pooling its resources,

reducing their costs and diversifying its portfolio of schools at the same time.

The author asked athletic directors and senior staff administrators at the schools that

partner with outsourced company about their relationship (as cited in Johnson, K., 2005). The

pilot study examined the details of the contracts including the length of the term and the financial

guarantee. It also pinpointed the strengths and weaknesses of outsourced marketing from the

school’s perspective while inquiring into the school’s level of satisfaction with the outsourced

relationship. This current study will provide the outsourced company a chance to respond with

its own sentiments about the relationship and future issues related to outsourced marketing.

Upon completion of the study, a analysis of the schools’ responses in conjunction wit the

responses of the outsourced marketing companies could help make for a better relationship in the

future.

Statement of the Problem

The purpose of this study is to examine outsourced marketing in Division I intercollegiate

athletics from the outsourced marketing companies’ perspective, particularly the properties

directly affiliated with the schools. An analysis of the respondents’ answers can help improve

future outsourced relationships from a financial standpoint, addressing areas that may need

future consideration within the context of higher education.

Research Questions

• What are the primary goals of outsourced companies?

• What are the strengths and weaknesses of outsourced marketing companies?

10

• How satisfied are outsourced marketing companies of their existing relationship with

their partner university or college?

• Is it easier for outsourced marketing companies to work with a public or private

institution of higher education? Why?

• At what level is outsourced marketing a good fit within college athletics? (Just BCS

schools, some Division I-A schools, I-AA schools, I-AAA, II, III, NAIA, junior colleges,

community colleges)

• What do outsourced marketing companies perceive as the future problems with

outsourced marketing?

• How often do outsourced companies meet and fail to meet their financial guarantee to

their schools?

• What business opportunities do outsourced companies desire to see in the future?

• What sponsorship categories are presently being sold?

• What sponsorship categories are presently being ignored in sales?

• Why do outsourced companies sell certain sports and not others?

• What impact would alcohol sponsorships have on sales revenue if the school permitted

them more freely?

• What impact would lottery or casino sponsorships have on sales revenue if the school

permitted them more freely?

• What are outsourced marketing companies’ beliefs towards Title IX legislation?

• How many females are working with outsourced marketing companies and in what

positions?

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• How many minorities (specifically racial and ethnic minorities) are working with

outsourced marketing companies and in what positions?

• Is there a demonstrated history of advancement for females and minorities within

outsourced marketing companies?

• What interest do outsourced marketing companies have in selling high school athletics?

Definition of Terms

• Account Executive – the title given to a sales representative from a property affiliated

with the parent outsourced company, frequently rank below the General Manager and

Assistant/Associate General Manager

• Athletic Director – the immediate head of an athletic department

• BCS Conferences – the six conferences widely regarded by coaches, administrators, fans,

sponsors and the media as the major conferences in Division I-A college sports (Atlantic

Coast Conference, Big East Conference, Big Ten Conference, Big Twelve Conference,

Pac Ten Conference, and Southeastern Conference)

• Categories – corporate partners that fall into one particular area such as: health care,

cellular service, fast food restaurants, insurance, banking et al

• Division One – the highest level of intercollegiate competition as compared to the

Division II, III, and lower levels, schools may compete in Division I in some sports but a

lesser level in others

• Division I-A – the highest level of football competition in intercollegiate athletics, each

school must offer 85 full scholarships relative to I-AA football (only 65 scholarships

offered) or lower

12

• Exclusivity – promising a corporate partner that no competitor or rival of theirs will have

the opportunity to become a corporate partner, for example, an exclusive marketing

relationship with Coca Cola would preclude Pepsi Cola from any opportunity to become

involved as a corporate sponsor

• Future sales – any additional dollars brought in by an outsourcing marketing group

beyond what that group originally guarantees the athletic department

• General Manager – the title of the head of an outsourced marketing property that is

affiliated with a particular school, for example, Gary Sobba is the General Manager of

Tar Heel Sports Marketing, the outsourced marketing property for UNC Athletics. Tar

Heel Sports Marketing’s parent company is Learfield Communications

• Hospitality – packaging such things as tickets, priority parking, a private tailgate area,

and food and beverage for guests to enjoy separate from the average fan at a sporting

event

• In-house marketing – a group of individuals directly employed by a school and working

within the guidelines and framework of the athletic department to market and promote

the athletic program

• Inventory – the items that are available for sale to sponsor such as signage at athletic

facilities, radio commercials during game broadcasts, print media, television commercials

on coach’s shows, etc.

• Licensing - To give or yield permission to or for the use of school logos, trademarks, and

other affiliated symbols

• Marketing – the selling of anything for trade or money

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• NCAA – National Collegiate Athletic Association - governing body of intercollegiate

athletics

• Outsourcing sports marketing – an independent contractor hired by a school or university

to provide marketing services

• Parent Company – the outsourced company that oversees all the properties affiliated with

that company, for example, Host Communications is the parent company that oversees

the properties at Arizona, Kentucky and Michigan

• Pouring Rights – determining the official beverage of an athletic sporting event, athletic

department or university/college

• Print Media – the selling of advertising on game programs, ticket backs, posters, schedule

cards, beverage cups, and more

• Promotions – gimmicks designed to enhance the ambiance of a sporting event and

typically implemented to increase attendance

• Property – the particular extension of a parent company assigned to work with a school or

university – Tar Heel Sports Marketing is the property associated with the athletic

department at the University of North Carolina – its parent company is Learfield

Communications

• RFP – Request for Proposal; the athletic department asks outsourced companies to submit

their proposal for overseeing the department’s marketing rights

• Signage – billboards and signs found on an athletic department field or facility, also see

videoboard definition

• Sponsorship – the packaging of inventory to be sold for a value to a business

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• Sports Marketing Director – the individual responsible for directly overseeing the

marketing of an athletic department; usually reports to the athletic director

• Title IX – federal legislation that states that no person in the United States shall, on the

basis of sex, be excluded from participation in, be denied the benefits of, or be subjected

to discrimination under any educational program or activity receiving federal financial

assistance

• Videoboard – a large, highly visible television screen at sporting event that allows for

replays, statistics, videos, highlights, and more, including advertising and commercials

Limitations of the Study

Limitations for this study include the general managers’ willingness to participate and

answer the questionnaire honestly. Limitations also include the general managers’ willingness to

share detailed information about their specific marketing contracts and relationship.

Additionally, general managers may not be familiar with the marketing agreements of other

schools.

Another limitation is that some schools may have several outsourced companies

overseeing their sales efforts. One company may handle sales for the radio and television. A

second may direct the sales for the athletic department’s signage at athletic facilities. And a third

may manage the sales for corporate hospitality and promotions. For example, the outsourced

marketing company Action Sports Media has emerged as a firm that focuses on the sale of

signage and corporate partnership, but not necessarily multi-media rights such as the commercial

sales on radio broadcasts. To address this concern, only schools with a single outsourced

marketing partner were selected to participate in this study.

15

Finally, as noted above, not all schools in the six major conferences have an outsourced

marketing relationship thereby limiting the initial sample size. However, this was offset with the

addition of 19 schools that are not in the six major conferences but have existing relationship

with the major outsourced marketing companies.

Delimitations of the Study

This study was delimited to outsourced marketing companies at select major NCAA

Division I-A schools as smaller schools do not incorporate outsourced marketing partners. This

tends to happen because the financial return at a smaller Division I-A school is insignificant

relative to that revenue earned with the schools in the six major conferences. The research also

does not include smaller schools at the Division I-A, I-AA, I-AAA, II, III, or NAIA level.

Generalizations about these groups should be made with caution.

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CHAPTER TWO

REVIEW OF LITERATURE

In examining outsourced marketing in intercollegiate athletics, one must first look at the

marketing efforts on the college campus in general. It is important to determine whether

marketing is purely concentrated in athletics or whether it carries over to other parts of a campus.

One must also examine corporate sponsorships’ role in intercollegiate athletics and its evolution

over time. With regard to this aspect of sports marketing, two primary concerns are to be noted.

First, excessive commercialization in intercollegiate athletics and on the campus is an area of

concern to many faculty members. Second, due to the students on campus, restrictions may exist

in a school’s relationships with certain corporate partners.

After literature in these areas has been reviewed, the history of outsourced marketing in

intercollegiate athletics can be explored. An overview of the selection process of an outsourced

marketing company as well as an examination of current relationships is also beneficial to

familiarize readers with the practice and fair market values of existing contracts. This will also

include general concerns of outsourced marketing relationships and outsourced marketing’s

significance relative to Title IX. Finally, it is important to have an overview of future trends and

potential ventures that outsourced marketing companies may be exploring.

Outsourcing in Higher Education

When a student is hungry after hours at the University of Virginia and the dining halls are

closed, he or she might leave his or her on-campus dorm room and head to the Tree House to

17

pick up a Pizza Hut personal pizza. At Virginia Tech, a student with the similar case of hunger

pangs might get a Chick-fil-a sandwich and finish it off with yogurt from TCBY, both of which

offer their food services on the campus in Blacksburg, Virginia. At Louisiana State University,

one can visit the student union on campus and enjoy fast food from McDonald’s or can stop by

the on-campus Barnes & Nobles for a newspaper or new book. They can even make plans for a

spring break trip at an on-campus travel agency. In Atlanta, Georgia Tech students enjoy

Einstein Brothers bagels as well as an optical center and a Hair Cuttery. Other schools’ student

unions offer pizza from Pizza Hut or gourmet coffee from Starbucks (McDearmon, 2005).

Providing a bowling alley or snack bar at the student union is nice, but amenities such as

on-campus theaters, grocery stores, banks, barber shops/salons, and dry cleaning services are

becoming more common each year (Moore, 2005). Such businesses are frequently operated by

corporate entities that also operate off campus in the community. This might include a

Wachovia bank, Great Clips hair salon or Regal Cinema theaters. Essentially, a school

outsources these services to a trusted corporate entity.

Many campuses around the country outsource their food preparation in the dining halls to

ARAMARK, a company that specializes in mass food preparations for hospitals, colleges and

universities, athletic venues and more. Working with corporate partners exists everywhere as

Rutgers maintains a $10 million relationship with Coca-Cola to be the official drink provider for

the campus and recently received $1 million from Nabisco for the naming rights for the Nabisco

Center for Advanced Food Technology, a center designed to enhance food technology with the

use of scientific principles (Reilly, 2005). In Athens, Georgia, the Terry College of Business has

a Coca-Cola Center for Marketing Studies, in addition to the Terry-IBM Seminar Series. Hence,

outsourcing and corporate involvement is prevalent on campus, but often more discretely.

18

Where it is becoming less discrete is the outsourcing of services within the classroom and

with services instrumental to the educational mission. To decrease the escalating cost of higher

education, outsourcing instruction is becoming more widely accepted on college campuses

(Schibik & Harrington, 2004). The debate of whether outsourced instruction in higher education

reduces expenses or whether it depreciates the quality of education is a debate for others, but it is

becoming more widely used in both distance learning and even on campus. The primary reasons

for outsourcing include a reduction and greater control of operating costs in addition to access to

resources not otherwise readily available. For example, an adjunct instructor can provide

knowledge and opportunities that a school might not otherwise provide for its students.

Privatization is a term that is frequently associated with elementary and secondary

education, but it is also synonymous with outsourcing or contracting school services (Palm,

2001). Privatization can free up resources for other purposes and offer assistance with a difficult

function such as computer technology (Moore, 2002). Further advantages of privatization or

outsourcing in the educational sense include positive public relations with the surrounding

communities and fast-start-ups or evolution of curriculums when necessary (Phillips, Ahrabi-

Fard, & Edginton, 2000). At the same time, Phillips, Ahrabi-Fard and Edginton (2000) also are

quick to note that disadvantages of outsourced efforts in the classroom can include: loss of

control of curriculum implementation, displacement of employees, philosophical differences,

problems in meshing organizational cultures, and issues with overall assessment and

accountability.

Other places where outsourcing in higher education can occur include counseling and

health services, student activities and residence hall management (Williams, 1998). Services are

offered more efficiency and at lower costs to the school. Another area frequently outsourced is

19

auxiliary services. This can encompass alumni relations, landscaping, janitorial needs, campus

security and long distance providers (Bartem & Manning, 2001). Proponents of outsourcing note

that such efforts can result in volume purchases, more efficient and direct organization, and a

simplification in the management of services that can in turn yield a greater focus for the school

on education and research. Outsourced partnerships can yield new technology that a college

might not otherwise afford and it can provide alternative services better in a variety of manners.

In some areas, such as bookstore operations, printing, information technologies, academic

records, child-care services, recreational facilities, parking or dining services and residential

halls, schools can now earn a profit due to the switch from in-house operations to outsourcing

(VanHorn-Grassmeyer & Stoner, 2001).

Major concerns with outsourced efforts in higher education can be traced back to a

handful of themes. The first consists of a loss of control by the university and concerns

regarding the policy and procedures by which an outsourced company obtains its results

(Jeffries, 1996). Many times, these policies can conflict with what the university is trying to

promote in its values and mission (Pulley, 2000). An example of this might include an

outsourced company’s unfair labor practices of which an institution of higher education could

have limited control over other than to terminate the relationship. An additional concern would

be the outsourced company purely taking a business approach to its activities and looking at the

bottom line of dollars and cents (Wertz, 1997). If an institution of higher education adopted this

philosophy in educating students, only the business and medical schools would likely exist.

Hence, a difference of opinion in philosophies relative to the educational mission can also create

further conflict. Bartem and Manning (2001) note that in working with outsourcing companies

in higher education, regardless of the task, there must be great attention paid to the selection

20

process and continuous communication is vital for both the school and the company to be

successful. And if the relationship does not work, termination of the relationship should be fairly

simple.

Higher Education Concerns of Commercialization in Intercollegiate Athletics

For a college or university president, intercollegiate athletics is just one of the many

concerns on his or her plate. In the past, it was enough for university administrators to use a

football Saturday to entertain donors and revel in the school spirit. Today, university

administrators are touched more by the legal issues in college athletics, such as Title IX, contract

law, and the rights of student-athletes (Bernard, 2003). They must also have a better

understanding of complexity of the business of intercollegiate athletics whether it is facility

expansion, concession and pouring rights, marketing revenue, luxury suites and more. Bernard

(2003) notes that regulatory issues such as the NCAA, the IRS implications or simply listening to

the voices of faculty and alumni have changed dramatically in recent years. Policies and

procedures are becoming more complex as presidents try to establish intercollegiate athletics’

role in higher education.

Wheeler (1987) observes that five glaring concerns exist within sports in higher

education. The first is governance and administration of intercollegiate athletics on a college

campus and not just within an athletic department. The second addresses the life of the student-

athlete after graduation. The third concerns the academic and social experiences of student-

athletes while they are on campus. The fourth addresses improved academic support systems

within intercollegiate athletics. And the final concern examines financing athletic programs,

including the rising cost of coaches’ salaries in certain sports as well as the cost of educating

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student-athletes and constructing and maintaining the athletic facilities in which they compete

(Wheeler, 1987).

Wheeler (1987) notes that because each school operates under different accounting

practices, it is difficult to compare schools across the board. However, it is widely accepted that

most athletic departments in Division I-A operate in the red each year and even those that

operate in the black may have an outstanding debt service that is not taken into account (Putler &

Wolfe, 1999). Rolnick (1998) discerns that without support from the university, the average

Division I-A athletic department faced a deficit of $823,000 in 1997.

Because of these deficits additional sources of revenue are often sought by athletic

administrators. Private contributions can make up some of the financial difference as Fulks

(2000) noted that annual charitable donations in Division I-A athletic departments doubled from

the $1.55 million average in 1990 to $3.5 million in 1999. To compliment the donations,

television revenue and corporate partners in Division I-A athletics have also become necessary

sources of income. These two latter sources of revenue have generated much dissent from

faculty around the nation.

While each Division I-A athletic department has a position known as a Faculty

Representative where one faculty member can voice concerns of the collective faculty to senior

athletic administers, that has not helped the faculty with regards to the issue of excessive

commercialization in college sports. In fact, Cockley and Roswal (1994) found that faculty at

Division I schools are less satisfied with the athletic department than the faculty at Division II or

III schools. While this unhappiness can be traced back to academic concerns, a demonstrated

history of athletic abuse and a perceived overemphasis of athletics over academics,

22

overcommercialization is one concern that faculty members are discussing on a more regular

basis.

For example, there is a growing concern, as expressed recently by the Knight

Commission, about television having too much power to dictate the starting times of college

football games, including midweek games (Hosick, 2005). While a new station like ESPNU

promises to broadcast a variety of Olympic and women’s sports, the fundamental business

principle comes back to the network making revenue at the expense of the student-athlete. The

same principle holds true for a school looking for national exposure for its football program on

ESPN. A school may play a game on Thursday, disrupting the academic mission of the

university, for the sake of television revenue and other intangible benefits for the athletic

department.

The other growing concern, overcommercialization, comes in a variety of forms. For

some critics, it appears in the sense of a Nike or Adidas company having exclusive apparel rights

over a university’s athletic department. Student-athletes serve as the model or advertising

billboard for these apparel giants in exchange for free or discounted equipment for the athletic

teams. At some schools, the head coaches receive a stipend from the company while the student-

athletes are paid nothing (Padilla and Baumer, 1994). Furthermore, a simple football game such

as the Fiesta Bowl became the Tostitos Fiesta Bowl in 1995 with the schools, coaches and

student-athletes serving as the main attraction in heightening awareness of the Tostitos brand of

potato chips (Putler & Wolfe, 1999). Such exploitation of student-athletes at the expense of

earning a few additional dollars is a frequent rallying cry amongst university faculty and also

many advocates of reform in college athletics.

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Corporate Sponsorships in Intercollegiate Athletics

In 1983, an article on marketing intercollegiate athletics identified the importance of

creating central advertising themes to encourage fans to attendance sporting events. Advertising

was the main concern of those few schools with sports marketing directors (White & Murray,

1983). In 1989, sports marketing departments were expected to tie in corporate sponsors as an

additional revenue source (Miller, 1989) Six years later, Stevens, Loudon and McConkey (1995)

found that filling the seats, generating revenue through corporate partnerships, enhancing

attendance figures and overseeing licensing efforts were priority expectations of college

athletics’ marketing departments. As intercollegiate athletic departments receive less and less

funding from their schools each year, athletic directors are in a continuous need to find additional

sources of revenue to operate their budget. They frequently look to marketing and the help of

corporate sponsors.

In addition to an increase in private contributions, revenue is being garnered through an

increase in corporate sponsorships. Companies like State Farm or Cingular see that athletic

departments have access to large number of fans through their sporting events in addition to

databases of their fans and school alumni. This access enables companies to form a relationship

with athletic departments in the form of a sponsorship (McDonald & Sutton, 1999). Sponsors

might have advertising in a program, on a videoboard or through a mailing to season-ticket

holders of an athletic department. Coaches within the athletic department may be used to

endorse products and sponsors may use an athletic department logo, such as a Georgia Bulldog,

in its advertising to tap on a fan’s loyalty. McDonald and Sutton (1999) also found that

corporate sponsors may host VIP events prior to sporting events and may use tickets to athletic

events for their own clients. At the end of the day, the athletic department earns valuable

24

revenue to assist in balancing its budget, while the corporate sponsor gains exposure, public

awareness and branding opportunity for its products.

Exclusivity is an area of corporate sponsorships that has seen significant growth as

sponsors want to partner with athletic departments, but only if their competitors are kept at a

distance (Hong & McDonald, 2002). Coca-Cola, in trying to enhance their image with the fans

at the sporting event, is not going to want to see Pepsi advertising too. It does not bode well for

future sales of Coke if its competitors are generating product awareness at the same event.

Hence, athletic departments may offer exclusivity to a corporate sponsor insuring that rivals will

not be able to associate with the athletic events.

While corporate sponsorships can generate revenue, they are also valuable in helping

develop the athletic department’s brand (Felt, 2002). Partnering with Nike or other national

corporate partners enhances the opportunity for nationally televised appearances for a school’s

athletic programs. There is also a prestige factor that comes with select national sponsors

relative to local sponsors. Felt also notes that such partnerships can provide additional

advertising opportunities, particularly if a sponsor is willing to tailor the advertising theme

relative to a football or basketball season. An example of this might include ticket giveaways or

in-store advertising that helps the sponsor sell the product, but also keeps the athletic department

in the consumers’ minds prior to, throughout and after the respective season.

In addition to branding, sponsorships and intercollegiate athletics work well together as

sports bring in larger quantities of passionate fans that a corporate partner could reach with its

advertising (Kuzma, Veltri, Kuzma, & Miller, 2003). College sports are highly visible and

include consumers that encompass a large demographic (Sleight, 1989). But unlike past

relationships, today’s corporate sponsorships are done strategically in the business standpoint

25

and with greater thought to the company’s financial value (Amis, Pant, & Slack, 1997).

Shanklin and Kuzma (1992) found that college sports sponsorships are a good fit for businesses

because it enhances product awareness and can lead to increased consumer purchases. White

and Irwin (1996) echoed these sentiments in their findings. The consumer exposure and brand

equity are also positive attributes that can not be ignored (Kuzma et al., 2003).

Interestingly enough, Berrett and Slack (1999) found that many corporate partnerships

are the results of peer pressure. For example, if Pepsi is going to sponsor an athletic program,

Coca-Cola does not want to be left behind so it will also follow that sponsorship route. At some

point in the past, a company acted as a “first-mover” in being the first to trying the advertising

approach through intercollegiate athletics instead of traditional methods like television, radio and

print media. Rival companies simply did not want to appear outside of the norm relative to what

their competitors were trying (Patterson, 1993). Berrett and Slack (1999) noted that this direct

competitor impact led to an escalade in sponsorships while athletic departments were happy to

partake in the new revenue source. By 1993, Irwin found that of 150 NCAA Division I and II

institutions surveyed, 90 percent had a corporate sponsorship program in place. This continues

today as athletic departments receive less financial support from the school each year and must

draw on other avenues of funding.

Concerns with Sponsorships in Intercollegiate Athletics

While corporate sponsorships in intercollegiate athletics can bring in additional revenue

to an athletic department, it does not come without concerns. Within an institution of higher

education, the primary focus tends to include educational development and research. Athletics

are supposed to be an extracurricular activity that a school offers instead of serving as an

26

“entertainment complex” on campus (Leach, 1998, p. 1). Gray (1996) notes that such

partnerships are detrimental and contribute to the win at all costs philosophy that many fans,

coaches, administrators and student-athletes come to accept. Cutler (1999) adds that naming

rights deals can assist in the development of grandeur athletic facilities while academic buildings

continue to age and disintegrate. Many college presidents also believe that the corporate

involvement in college sports is in conflict with the educational mission of the school and the

amateur status of the athletes themselves (Covell, 2001). Covell (2001) noted that Bill Cleary,

the former director of athletics at Harvard University, once referred to the Nike “swoosh” as

symbolic for “I own you” when it comes to corporate partnerships between athletics and

universities. There is also the concern of such sponsorships benefiting athletics exclusively and

not helping the rest of campus (Cutler, 1999).

At the same time, James Delany (1997), the commissioner of the Big Ten Conference

highlights that intercollegiate athletics has been impacted by such tremendous technological

advances in recent years and that cannot be ignored. Delany touches on the media growth

through radio, television and the Internet and that revenue via these channels is available for the

taking. And if the schools do not take it, a third party will and it will not be recovered. Cutler

(1999) stresses this is the case with the National Collegiate Athletic Association handing the

marketing rights of their championships to Host Communications. A $6 billion deal reached in

November 1999 and spread over 11 years is paid to the NCAA by Host for the exclusive rights to

March Madness. This is up from the previous seven year deal valued at $1.512 billion. Hence,

annual revenue to the NCAA increased from $216 million to $545 million (Zimbalist, 1999).

The NCAA receives six to ten percent for administrative overhead while schools in Divisions II

27

and III earn a collective 7.5 percent. The remainder of the funds is split amongst the schools in

Division I, yielding approximately $200,000 per institution.

Geiger (2004) also highlights the increasing commercialization on other parts of campus

including business schools or the sciences forming corporate alliances with outside parties.

Large grants and endowments can create a conflict of interest in research efforts if future

financial support is based upon desired research findings for a business supporter. But often,

restrictions are in place to keep that from happening. In similar fashion, most corporate

sponsorships in athletics will have comparable restrictions (Sneath, Hoch, Kennett, & Erdmann,

2000).

Restrictions on Sponsorships in Intercollegiate Athletics

The National Collegiate Athletic Association has a strict policy on no gambling being

permitted by student-athletes, coaches and athletic administrators. It does this to prevent games

from being fixed or incidents of point shaving from altering the outcome of sporting events. The

general philosophy is that if gambling is involved, it is best to stay away from this activity. This

is not the case in other sports in the United States as there have been numerous corporate

partnerships involving some aspect of gambling.

The 2000 baseball season saw the San Diego Padres hand the naming rights of the overall

season to the Sycuan Indian Casino for $1.5 million (Rofe, 2000a). Rofe found that Major

League teams in Arizona, Houston, Los Angeles, Milwaukee, New York, St. Louis, and San

Francisco also had sponsorships with casino operators or gaming promoters (2000b). However,

Major League Baseball lists the following restrictions: casinos could not allow gambling on

sports and casinos could not use team or league logos in any promotions or advertising.

28

In other professional sports, the National Basketball Association has limited involvement

with gambling sponsorships, though the Seattle Supersonics partnered with the Washington State

Lottery in 2000 (“Coast to Coast,” 2000b). The National Football League presently maintains

strict policies limiting its teams’ involvement with gambling (Associated Press, 2005c). In

racing, NASCAR has permitted gambling sponsors in the form of the Las Vegas Motor

Speedway’s four-year deal with Sam’s Town Hotel & Gambling Hall that valued at $250,000

annually from 1998 through 2001 (“Auto Racing,” 2000). The year 2000 saw the Wisconsin

state lottery team with NASCAR (“Coast to Coast,” 2000a), while the Michigan International

Speedway also partnered with the Michigan State lottery in a promotion in 2004 (“Coast to

Coast,” 2004a).

The PGA and LPGA golf tours have welcomed gambling sponsors in the form of

secondary sponsorships provided that casino sponsors were touted as resorts. The word “casino”

was to be avoided in advertising or promotions (Lieberman, 2004). The National Hockey

League’s Minnesota Wild had a long-term sponsorship with the Minnesota State Lottery until

2003 when the lottery’s advertising budget was significantly reduced (Liberman, 2003a).

Further south, the Phoenix Coyotes of the NHL have enjoyed a partnership with the Arizona

Lottery (Liberman, 2002).

In the Women’s National Basketball Association, the Mohegan Tribe purchased the

Connecticut Suns team. The Tribe is known for the Mohegan Casino in Connecticut (Lee,

2003c). Lee highlights that the Detroit Shock of the WNBA is another team with a gambling

partner as the Michigan Lottery is an annual sponsor. The Arena Football League (2000) also

has maintained lottery sponsorships with the Albany and Buffalo franchises while within Major

League Soccer, DC United and the Columbus Crew have worked with their respective state and

29

area lotteries over the last five years (“MLS League,” 2002). Lottery-backed bonds have also

been used for a revenue source in Portland as the city tried to build support and funding for a

new Major League Baseball facility (“Coast to Coast,” 1999). And even in boxing, a gambling

casino advertised on the back of Bernard Hopkins during his September 2001 championship

fight with Felix Trinidad (Klein, 2001).

In the college setting, gambling sponsors are less prevalent but they still exist. It is only

fitting that the University of Nevada Las Vegas athletic department have a corporate partnership

with Station Casinos (Lee, 2001f), but it also uses its basketball arena to host many events for the

local casinos including championship boxing (Mitchell, 1998). Up to 9,000 seats for such events

are sold in packages with UNLV basketball tickets insuring that the athletic department earns

additional revenue on the facility and with the help of the casino.

In 2000, the National Association of Basketball Coaches held its annual convention in

Las Vegas despite the concerns that many coaches and administrators have with gambling and

point shaving as it relates to college basketball (Cameron, 2000). Recent years have also seen

Las Vegas and Nevada host the National Association of Collegiate Directors of Athletics annual

conference and seminars in facilities, marketing and fundraising. The college football 2004 bowl

schedule included the Pioneer PureVision Las Vegas bowl on December 23rd as well as the

Independence Bowl in Shreveport, Louisiana, a town also known for its strong tradition of

gambling (“Postseason Bowl,” 2005). Closer to campus, Southern University used a sponsorship

with the Louisiana Lottery Commission to help fund a new $2.3 million upgrade in its

scoreboards (Cameron, 2002). And Virginia Tech athletics has a corporate sponsorship with the

Virginia Lottery, while the University of Virginia athletic department includes the state lottery in

its core four corporate partners plan at a revenue gain of $350,000 annually (Williams, 2001).

30

This continues while the NCAA uses March Madness and corporate partners to plug anti-

gambling messages in its advertising (Bernstein, 2002).

From the alcohol sponsorship standpoint, James Copple (2005), the director of the

International Institute for Alcohol Awareness, states that an estimated 1,400 college students die

a year as a result of college drinking in addition to the additional students that suffer serious

injuries, assaults, and other related issues. A 2002 study by the National Institute on Alcohol

Abuse and Alcoholism found that two in five college students are binge drinkers and that 70,000

students are victims of alcohol-related sexual assault (“Bill Would,” 2005). George Hacker,

director of the Center for Science in the Public Interest’s alcohol policies project, adds that the

alcohol industry clearly targets college and underage drinkers (Associated Press, 2003).

Hacker’s project found that nearly $600 million in alcohol advertising was tied to sports

programming in 2002 and $58 million of that was directed at intercollegiate athletics. That

resulted in more than 6,200 ads. The NCAA men’s basketball tournament had 939 ads that year,

more than the Super Bowl, World Series, college football bowl games and NFL Monday Night

football combined and costing the alcohol industry $21 million.

In 2003, 4,747 commercials related to alcohol were broadcast during intercollegiate

athletic events at a cost of more than $52 million (“Osborne Pushes,” 2005). Of those figures,

forty percent was spent on March Madness, but the total number of ads declined to 395. In

defense of the alcohol industry, Jeff Becker, president of the Beer Institute, stresses that the

greater part of the fans and college students associated with intercollegiate athletic events are of

legal drinking age (Associated Press, 2003).

Because of statistics like this, former North Carolina men’s basketball coach Dean Smith

and retired Nebraska football coach Tom Osborne are leading a “College Commitment”

31

campaign aimed at eliminating all alcohol advertising on college sports broadcasts. Former

UCLA basketball coach John Wooden and Penn State football coach Joe Paterno have added

their support. More than 225 NCAA schools and two NCAA conferences have pledged their

support, though 168 are Division II or III schools and only Baylor, Northwester, Ohio State,

Florida and Minnesota are committed from the six power conferences (Johnson, D., 2005). Ohio

State lost $270,000 in revenue in taking its stand (Lee, 2004j). Osborne has pushed for a ban of

alcohol ads in intercollegiate athletics to the House of Representatives (“Osborne Pushes,” 2005)

twice over the last two years but to no avail. This is likely due to the fact that 380 of 435 House

members received an average of $11,650 last year in donations from the alcohol industry (Grady,

2005).

The University of Hawaii has a sponsorship with Budweiser that generates $180,000 in

revenue for the athletic department each year. The sale of alcohol on campus generates an

additional $435,000 in annual revenue (Alonso, 2005). Currently, the president of the school is

coming under criticism from the state governor and the state chapter of Mothers Against Drunk

Driving for permitting the sales and the sponsorship. In 1998, Baylor University, the University

of North Carolina, the University of Minnesota and the University of Kentucky placed greater

restrictions or eliminated their alcohol partnerships (Conklin, 1999a). Minnesota lost $225,000

in sponsorship revenue. Within the Big Ten Conference, Conklin notes that Northwestern

University continues their alcohol sponsorship but with tight control and plenty of restrictions.

Despite these reductions, a 2004 study by the Sports Business Journal found that of the schools

in the six major conferences, 18 had no affiliation with an alcohol sponsor, 24 only permitted

alcohol advertising on the radio and/or television broadcasts, while 21 maintained a full

sponsorship with an alcohol sponsor including signage, promotions and advertising through the

32

multi-media right (Lee, 2004j). Hence, 71 percent were still receiving sponsorship revenue from

the alcohol industry. Where alcohol partnerships worries college administrators is the negative

impact it has created within professional sports and the concern that similar issues and horror

stories will be on the campus in due time.

In New Jersey, a jury recently awarded a family $135 million in punitive and

compensatory damages from ARAMARK after a fan attending a Giants football game was

served alcohol even though he was past his limit. After the game, he drove home drunk and

crashed into the family returning home from a pumpkin-picking trip. A 2-year-old in the car

suffered a broken neck and smashed spinal cord in the accident. She is on a breathing machine

and consigned to a wheelchair today at age seven (Dvorchak, 2005a) with an injury that is

comparable to Christopher Reeves.

ARAMARK is appealing the verdict as the guilty fan paid a vendor extra money to

purchase alcohol beyond the two drink limit. Evidence indicated that the fan consumed 16 beers

throughout the day and also smoked marijuana. After the game, he and friends downed

additional alcohol at two strip clubs before eating at White Castle. It was after they left the fast

food restaurant that the fan ran into the family with an alcohol level three times the New Jersey

limit. In addition to the little girl’s injury, the child’s mother underwent reconstructive surgery

on her face and needed a rod inserted into a leg. The NFL, the New York Giants and the New

Jersey Sports & Exhibition Authority who oversee the athletic facility, were dropped from the

lawsuit and settled with the family for $750,000 (Dvorchak, 2005a).

Dvorchak highlights that the NFL, NBA, MLB and NASCAR have reacted to the ruling

with a tightening of their rules and policies related to alcohol sales, including limitations, early

cut-off of sales, earlier fan ejections and a reduction in the sizes of drinks. However, alcohol

33

sponsorships continue as before. Within the college setting, Murray Sperber, a retired professor

at Indiana University, once called alcohol the “oxygen of college sports” noting that the

sponsorship dollars drive the broadcasting of the events (Dvorchak, 2005b).

In the last three years, Dvorchak notes that celebratory festivities after sporting events

have turned into riots in Morgantown, West Virginia, Storrs, Connecticut, and Columbus, Ohio

(2005b). However, thousands of fans celebrated peacefully in Chapel Hill this spring after the

Tar Heels won the men’s basketball national championship. No cars were flipped, no fires were

set, no store windows were broken and no students were expelled. In Syracuse, fans can

purchase alcohol at football and men’s basketball games in the Carrier Dome. At Tulane

University, fans enjoy alcohol at their sporting events as well, including $4 beers at baseball

(Lewis, 2005). And the University of Pittsburgh and the University of Georgia both permit

alcohol for the fans who lease luxury boxes at their football stadium (Dvorchak, 2005b), while

fans at LSU will enjoy similar privileges this fall in their new luxury boxes (Lewis, 2005). The

University of Colorado eliminated alcohol sales at its football games in 1996, but alcohol is still

consumed in large quantities prior to the game and post-game (Bormann & Stone, 2001). And

fans in the luxury boxes at its football stadium still retain their alcohol privileges.

Critics of college athletics’ association with alcohol point to the death of 19-year-old

Samantha Spady at Colorado State in September after binge drinking on a football weekend. But

as Dvorchak highlights, Spady had posted an online message to friends about her plans to get

heavily intoxicated that weekend, getting “extremely wasted” over the Labor Day weekend

(2005b). She was found dead in a fraternity house with an alcohol limit of 0.43 or five times the

state’s legal limit.

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Where the line is drawn between personal accountability for one’s action versus whether

the blame should be shifted to alcohol sponsorships is a debate that will likely continue

indefinitely and not be resolved soon. The NCAA has limited beer advertising to one minute per

hour during the men’s basketball tournament, but can only control the alcohol industry’s

relationship with NCAA championship events, not the schools (Lewis, 2005). Lewis added that

in recent years, Tulane fans have complained when baseball NCAA Regionals and Super

Regionals were held at Tulane and alcohol sales were curbed.

In support of continuing alcohol partnerships, John Kaestner, the vice president of

consumer affairs for Anheuser-Busch, believes that a few fans spoil the fun for the large

majority. He cited that a 2004 study by the Nielsen Media Research indicated that close to 90

percent of college football and basketball television viewers are of legal drinking age (Johnson,

D., 2005). Kent Barrett, associate director of public and media relations for the NCAA,

indicated that the number of alcohol-related ads in 2002 and 2003 were significantly inflated. He

expressed that there were 108 alcohol ads in the 2004 NCAA men’s basketball tournament and

questions how the critics arrived at 939 in 2002 and 395 in 2003 (Johnson, D., 2005). Despite

Barrett’s rebuttal of the figures, the American Medical Association joined the no alcohol crusade

in April 2005 issuing a release calling for the NCAA to ban all future alcohol advertising

(Darlington, 2005a). This would include radio advertising by schools like Virginia and Virginia

that already restricted the amount of advertising that alcohol sponsors can have on their radio

broadcast (Johnson, D., 2005). Neither school sells alcohol at its sporting events.

Finding the right balance is the tough issue as respected University of Texas athletic

administrator Chris Plonsky stresses that alcohol is a part of that entertainment package that fans

come to expect at sporting events. And while fans do not make their decision purely on the

35

availability of alcohol, the Longhorns are competing with numerous other local sports franchises

for patrons (Conklin, 1999a). Plonsky also stresses that the sponsorship revenue from the

alcohol industry is a big part of helping to offset a budget that increases annually due to salary

increases, tuition increases, Title IX expenses and debt service for facilities. But any alcohol

sponsorship with the Longhorns ties in a “Think When You Drink” theme for the patrons that

would be advantageous for other schools to adopt.

Missouri maintains an alcohol sponsorship valued at $450,000 each year, Wisconsin

holds a deal worth $400,000 and Colorado State’s relationship with an alcohol sponsor generates

more than $250,000 annually (Lee, 2004j). If eliminated, replacing those financial holes in the

athletic budget would be next to impossible. Though their fight is admirable, neither Coach

Osborne, Smith, Wooden nor Paterno, none of whom have athletic administrative experience,

have offered financial alternatives in their current campaign against the alcohol industry’s

relationship with intercollegiate athletics.

An Overview of Outsourced Marketing

While college campuses have been limited in their commercialization that does not mean

it is non-existent, particularly when it comes to athletics. In addition to alcohol and

casino/lottery sponsorships, numerous other partnerships can exist. For example, UCLA signed

a six-year, $19 million contract with Adidas in September 1998 while Pepsi agreed to a 10-year,

$14 million arrangement in 1996 with Penn State Athletics (Bernstein, 1999). Unfortunately, the

rest of campus has been slow to understand that the school as a whole is a product or a

commodity that is of great value to the corporate world.

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A school might receive donated personal computers from a company, but not think about

the possibility of aligning the alumni association with a credit card company that brings funds

back to the school with each alumni purchase (Bent, Rode, Rogers, & Whitley, 2004). The

school might think about naming an athletic facility Value City Arena after a $15 million gift or

Wells Fargo Arena after a $5 million donation or Seafirst Bank Arena after a $5.1 contribution,

but does not think about naming campus buildings after corporate entities (Bernstein, 1999). Lee

(2000b) notes that athletic departments like Indiana and Notre Dame have completely shunned

this idea of commercial support, but find it harder to ignore the potentially half-million dollar

revenue opportunities that exist especially after Maryland sold their basketball arena naming

rights to Comcast Corporation for $20 million over 25 years. University administrators fear a

loss of control if there is too much of a relationship or reliance on the corporate entity, but with

other sources of revenue declining, corporate partnerships are becoming more of a necessity.

This is particularly true in intercollegiate athletics where scholarships costs are rising each year.

To look at the origin of outsourced companies’ involvement with athletic departments, it

is necessary to start in Lexington, Kentucky, and the origin of Host Communications. In 1973,

Jim Host bid on the rights for the University of Kentucky in what is the first believed outsourced

deal in intercollegiate athletics. Within ten years, Host had secured the rights to the Final Four

after convincing then NCAA president Walter Byers that corporate marketing was the wave of

the future (“The Interview,” 2005). Host knew that there was money to be made in advertising

and licensing and the affinity associated with the college sports fan. For some schools, that

meant just football or men’s basketball fans while for other schools a Total Campus Marketing

approach was necessary. The Total Campus philosophy included utilization of the club sports,

intramurals, dining halls and student activities in the complete advertising package for a

37

corporate sponsor. The Total Campus marketing idea does not offer as profitable a return to

Host Communications so the company has temporarily shelved the practice.

In working with colleges and universities and their marketing efforts, what Host strived

for was a clean venue comparable to the Olympic Games where there was limited signage and

less clutter in the advertising. The corporate partners who paid the most would receive these

exclusive opportunities to advertise. Host notes that the philosophy is not applied to the Bowl

Championship Series which is run outside the control of the NCAA (“The Interview,” 2005).

Today, Jim Host is no longer head of the company he started, but he has enjoyed seeing

the company grow to the point that it sells advertising on over 500 radio stations for the Final

Four (Bernstein, 1998). This is up from the 200 radio stations the company partnered with in

1982 (Crawley, 1999a). Host also prints game programs for over 43 NCAA championships and

operates most marketing and promotional aspects of the NCAA events. It annually earns over

$100 million in revenue (Bernstein, 2000b) and has not limited itself to just intercollegiate

athletics. Event marketing in junctures as diverse as Streetball and the National Tour

Association (tourism industry) have led the company to be recognized by the Sports Business

Journal as one of the top five marketing companies in the world and the premier in

intercollegiate athletics (Bernstein, 2000a).

With imitation being a great form of flattery, other companies became to surface to

challenge Host Communications as the “one-stop” shopping point for colleges and universities.

Companies realized what athletic departments were failing to grasp. Season-ticket holders were

more than just fans who wrote a check once a year for seats to a sporting event. These fans were

consumers that could spend up to $100,000 or more during a lifetime on tickets, concessions, and

38

parking (Lachowetz, Sutton, & McDonald, 2000). Not to mention, the fans were loyal to their

teams and everything associated with their team.

Corporate partners began to realize this and wanted to partner with schools. With money

to be made and Jim Host demonstrating some early financial return on investment for the

University of Kentucky, more start-up outsourced companies wanted to become involved in their

revenue opportunity. Some of the companies were locally owned and operated, but others were

more regional like an ISP Sports, Learfield Communications, or Nelligan Sports. Companies

and athletic departments sat down to best figure out which schools were good fits for which

company and how to best utilize the relationships over the long-term. After that outsourced

companies began to provide sponsorship options or packages to corporate sponsors based on

what other schools were doing (Lachowetz et al., 2000).

In creating packages of what could be sold, the typical items included signage at the

athletic facilities, television rights and radio broadcast rights (Cohen, 1999c). Cohen adds that

higher dollar values were attached to such sponsorship packages and enabled athletic department

to offset growing expenses including scholarships and rising facility costs. Schools would

“bundle” their inventory and see more of the revenue return directly to the school instead of

multiple outside parties (Cohen, 1999a). Outsourced marketing enabled corporate sponsors to

visit one individual or company instead of stopping at the radio station to gain radio advertising

during game broadcasts, stopping at the local television station to gain on-air advertising during

coaches’ television shows, then concluding with a visit to the athletic department for additional

advertising signage at the athletic facilities. This is especially true as videoboards became more

and more detailed in intercollegiate athletic facilities starting with the University of Nebraska in

1994 (Steinbach, 2002b).

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Only in the last ten years have scoreboards been supplemented or replaced with

videoboards that provided fans with instant replays and advertising messages. A full-color video

board could now offer “fan of the game” or “play of the game” or “great moments in history”

segments that could be presented in collaboration with a corporate sponsor. It could also roll a

commercial exactly like the ones seen on television at home. Steinbach (2002b) notes that with

their addition of videoboards, Michigan State experienced a sponsorship revenue increase from

$400,000 in the pre-video days in 1998 to more than $3 million annually by 2002.

While these videoboard improvements provided new fan entertainment and sponsorship

revenue, they did not come without a price. Many older fans thought the videoboard was too

much like the television the chose to leave at home. Others felt the noise was too distracting and

took away from the natural elements of the sporting event including the fans’ cheering, the band

and cheerleaders (Conklin, 1999c). Athletic administrators and outsourced companies had to

evolve to package their advertising in subtle fashion around trivia contests, replays and scores

from around the country. Pure video commercials advertising products were not welcomed in

the stadium as it distracted from the entertainment aspect of the game itself. Furthermore,

sponsors recognized that if fans were not happy with the advertising, their affinity to the sponsor

would not be positive either. And too much advertising could lead to a clutter of sponsors with

their advertising messages being lost on the fans (Conklin, 1999c). The message was heard by

the outsourced companies which now included Viacom Sport and Action Sports Media. Mullen

(1999a) notes that Action Sports Media, owned by billionaire Paul Allen, is a rising force in

outsourced marketing, while Nelligan Sports has become more of a presence in outsourced

marketing specifically with schools in the northeast (Johnson, K., 2005)

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On the college campus, securing an outsourced marketing relationship is initiated through

a search process. The athletic department will typically sit down and outline what they would

like to see from an outsourced partner (Begovich, 2002). This could include: selling advertising

on radio and television broadcasts, the department’s website and all athletic facilities. For most

schools, outsourced companies offer the opportunity to streamline operations or provide

resources that might not otherwise exist, such as sales expertise (Li & Burden, 2002). Li and

Burden (2002) add that the athletic department may want a company to produce radio call-in

shows or coaches’ television shows in addition to the sales efforts. The outsourced companies

would have a greater opportunity to improve the quality of the broadcast and simplify the

production efforts.

In outlining their requests, some schools may include restrictions such as: no signage in

athletic facilities, no alcohol or tobacco sponsorships or all corporate partnerships subject to

annual review. The outline would also include review procedures, deadlines and specifics

requested by the athletic department (Begovich, 2002). When the athletic department is satisfied

with the outline they have pieced together, they will include it in a RFP or Request for Proposals.

The RFP will be sent to outsourced companies that will examine the athletic departments’

marketing opportunities and limitations. The RFP could be sent to local agencies capable of

handling the sales efforts, but at the Division I level, they are typically mailed to companies like

Host Communications, ISP Sports, Viacom Sports, Learfield Communications, ESPN Regional,

Action Sports Media and Nelligan Sports. The companies will have a deadline in which they can

submit their plans to the athletic department of how their company can best meet the athletic

department’s marketing needs. The company’s respective bid to the athletic department will

include financial aspects of their proposal such as the annual guarantee, the shared revenue

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component past the annual guarantee and the length of the proposed contract. It may also

include letters of recommendation from other schools or corporate partners and

samples/highlights of past successes.

For example, North Carolina may put out an RFP for their marketing rights detailing that

while television and radio rights are available, it is to be understood that no commercial signage

should be sold in the Dean Smith Center. Host Communications, Viacom Sports, ISP Sports,

Action Sports Media, ESPN Regional and Learfield Communications may all submit bids for the

athletic department to review.

After reviewing the bids, UNC athletic administrators may ask three of the companies to

come to campus for face-to-face presentations that can allow for more thorough questions and

answers. An important part of the bid process is talking with other schools represented by the

outsourced marketing company to see if that school is satisfied with their relationship (Begovich,

2002). Another school may indicate that a company is hard to work with or is frequently late on

meeting their payment deadlines to the athletic department. The background check is almost as

important as the on-campus presentation that details out what the company plans on providing if

they are chosen as the primary outsourced marketing partner (Robinson, 2004).

Robinson notes that background checks can also help determine what financial

agreements the company has worked well with in the past. Some deals include a straight up

royalty fee. A second option is the athletic department earning a set percentage of the gross

revenue with no guaranteed amount. A third route could include a split of the net profits. A

fourth option would include a sliding scale of royalties (Robinson, 2004). Today, most schools

opt for a guaranteed amount annually and a sliding scale of revenue after a set point (Johnson,

K., 2005).

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RFP’s may also include what existing corporate partner contracts will be turned over

from the athletic department to the outsourced marketing company (Lee, 2004h). For example,

in its last RFP, Kentucky indicated that they earned $5 million in sponsorship deals last year and

was in search of a seven-year deal that would include sponsorships for baseball and women’s

basketball, in addition to men’s basketball and football. A company submitting a bid of $3

million annually over three years and failing to mention women’s basketball and baseball in their

bid obviously did not read the RFP very closely.

After the on-campus presentations, the selection of the outsourced marketing partner

occurs. For a state-supported school, Begovich (2002) notes that an athletic department might

have to select the company that presents the greatest revenue option. However, it is important to

stress to the school that the past history of the company and compatibility of the company to the

athletic department needs to be factored in the decision as well. Athletic administrators from

North Carolina converse on a daily basis with their outsourced partner’s general manager, while

Kentucky includes their outsourced partner’s general manager in senior staff meetings each week

(Johnson, K., 2005). It is this type of compatibility and communication that enables the athletic

department to outsource yet still feels as if they are retaining control of the marketing efforts and

the department’s marketing rights.

After selecting the outsourced company, the letter-of-intent can be signed binding the

athletic department and the outsourced marketing company until the formalities of a final

contract can be agreed upon. Though this would appear to be a simple formality, the University

of Akron was sued by its former outsourced marketing partner when a new athletic director tried

to terminate the contract outside of the terms defined in the contract (“Court Finds,” 2004). Such

legal battles should be avoided as they only waste valuable time and financial resources. Upon

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agreement, the new outsourced partner will ideally meet all of the needs initially outlined by the

athletic department while surpassing the financial guarantee and revenue expectations over the

life of the contract.

Schools and Outsourced Marketing Relationships

To provide an overview of some of the existing outsourced marketing relationships

around the country, the Sport Business Journal has reported on many of the latest contract

signings or bid proposals over the last five years. Some reports are merely announcements of a

new agreement while other releases included specific contract financial figures. Cronan (2000)

initially reported on the success on ESPN Regional relationship with the University of South

Florida. Subsequently, Lee found that ESPN Regional struck a deal with the University of

Alabama-Birmingham (2000a) and the University of Nevada-Las Vegas (2000c), while the

University of Southern Mississippi signed with ISP Sports as its outsourced marketing partner

for a guarantee of $450,000 and a percentage of all sales beyond that mark (2000d).

The year 2001 saw Host Communications signing with the University of Michigan (Lee,

2001b) and Purdue University (Lee, 2001d), while Tulane University partnered with ISP Sports

(Lee, 2001c). The year also saw Clemson University commit to a joint venture of ISP

Sports/Learfield Communications (Lee, 2001g). Clemson was previously working with

Collegiate Sports Partners, but the local firm missed a $775,000 payment. Later in the year, the

University of Maryland decide to work with Viacom as its outsourced partner (Lee, 2001h) in an

eight-year, $16 million deal.

The 2001 year concluded with Iowa State forming a five-year deal with ESPN Regional

for $8.2 million minimum with the opportunity for growth beyond that number (Lee, 2001k).

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But the University of Louisville upstaged previous agreements prior to the New Year with a

reported and unprecedented 17-year agreement with Nelligan Sports Marketing that could

generate up to $5 million annually for the Cardinals’ athletic department (Lee, 2001l).

In 2002, the University of Houston partnered with ISP Sports for a ten-year deal (Lee,

2002a). Further north, the University of Colorado came to terms on a seven-year contract with

Learfield Communications (Lee, 2002b). ISP Sports also extended its relationship with Wake

Forest University for an additional five years through 2009 and with Virginia Tech for an

additional three years through 2006. The collaboration of ISP Sports/Learfield Communications

extended its outsourced marketing deal with Syracuse University through 2012 as it was set to

end in 2004 (Lee, 2002c).

In 2003, the University of Miami signed its first outsourced marketing contract,

partnering with ISP Sports and Learfield Communications in a seven-year contract (Lee, 2003a).

The University of South Carolina extended its multimedia rights to ISP Sports and Learfield

Communications in another dual partnership with a five-year deal worth a guaranteed $9.5

million (Lee, 2003b). Auburn University reached an agreement with ISP Sports in the fall of

2003 (Lee, 2003e), while the University of Minnesota started 2004 with five-year deal with

Learfield Communications (Lee, 2004a).

In 2004, the University of Arizona came to terms on a five-year agreement with Host

Communications (Lee, 2004b), while Oklahoma State University and Host agreed to a five-year

deal valued at $10.8 million guaranteed (2004c). Marquette University, coming off a Final Four

season in men’s basketball, agreed to an outsourced marketing contract with Nelligan Sports

(Lee, 2004d) and Stanford University joined the trend coming to terms with Viacom Sports (Lee,

2004g).

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The most significant outsourced marketing deal to date took place early in the fall of

2004 as Host Communications won the rights to the University of Kentucky athletics in a ten-

year deal valued at more than $80 million. Host placed a bid of $80.475 million edging the bid

of $80.35 million submitted by Learfield Communications, while ESPN Regional bid $74

million and Viacom Sports $55.25 (Smith, 2004). The previous deal was $17.65 million over the

course of five years and expired April 15, 2005 (Jordan, 2004). The annual guarantee in the first

seven years runs from $7.275 million to $7.95 million, plus 50% of all gross revenues beyond a

set amount. For the first year, that is $11 million and increases annually to $12.9 million by the

seventh year. The last three years see the guarantee increase to $8.2 million in year eight and

growing to $9 million by year ten. Kentucky would earn 50% of gross revenues above $13.2

million in year eight with that growing to $13.5 million in the ninth and tenth year (Jordan,

2004).

The new deal consists of the television and radio rights for football, men’s basketball,

women’s basketball and baseball which is significant given the Wildcats presence on television

throughout the men’s basketball season. It also includes the rights to the Wildcats’ website,

corporate sponsorship at all sporting events as well as stadium and arena signage at all Kentucky

athletic facilities, exclusive of Rupp Arena, home of the men’s basketball team (Smith, 2004).

Comparable schools in the region include Indiana University and the University of

Louisville. The Hoosiers earn $1.3 million guaranteed annually with its deal with Learfield

Communications and Louisville pockets approximately $1 million guaranteed annually from

Nelligan Sports (Smith, 2004). What drives the Kentucky value up significantly is the Wildcats’

fan base in the Commonwealth as well as the fact that men’s basketball games that are not on

national television are broadcast through the state on regional affiliates that are included in the

46

deal. And even games televised nationally by ESPN or the major networks can be replayed

regionally after the original broadcast. Essentially, every University of Kentucky men’s

basketball game is televised throughout the state. To further sweeten the deal, Host

Communications will air a 30-minute television show regularly throughout the state that is

devoted purely to Olympic Sports at Kentucky.

In addition to the television aspects, two unique inclusions in the contract include the

involvement of higher education and its educational mission. Host Communications will pay

$1.36 million of the overall guarantee directly to the president’s office to use on Singletary

Scholarships that are designed to keep the brightest high schools students in the Commonwealth.

Donors have been found to match the $1.36 million to create 25 new scholarships (Jordan, 2004).

Instead of leaving Kentucky for an Ivy League school, Duke or Virginia, the high school

students can attend the University of Kentucky free on a four-year scholarship. And this new

support is in addition to the $1 million that the athletic department already contributes back to

the university (Jordan, 2004). Finally to secure the relationship with the University of Kentucky,

Host Communications also promised the university $2.5 million annually in air time to promote

academic programs for the school on the radio and television broadcasts.

Concerns in Outsourced Marketing

While outsourced marketing can provide substantial revenue opportunities, it does have

some negative aspects. The initial time invested in the search process for an outsourced

company, plus the negotiation stages can absorb valuable time and resources. Day (1995)

reiterates that some administrators fear a loss of control in signing the deal. Furthermore,

47

escalators are necessary in the outsourced marketing arrangement to insure that the financial

revenue is growing with the current market value.

As with any marketing efforts, ambush marketing is also a fear. An athletic department

may hold one relationship with a corporate sponsor and the university may hold a relationship

with a rival sponsors that could create potential friction at university related events at an athletic

facility (McKelvey, 2002). In similar fashion, an outsourced marketing company may want to

work exclusively with one corporate partner such as Pepsi at their schools. But in the state of

Georgia, athletic departments might all desire partnerships with Coca-Cola. These concerns

need to be addresses in the RFP stage and upfront during campus visits.

There are also concerns regarding too much marketing in the sense that it can diminish

the value of a corporate sponsorship (Cawley, 1999b). A Wachovia logo may appear on a

courtside sign or on a logo on the basketball floor during the broadcast of the game. However,

television commercials may include Bank of America touting their company. This is a common

problem when too many people are selling sponsorships without communicating with other

involved entities. It can create clutter and devalue the sponsorship. Hence, the philosophy

embraced by Jim Host, that of a cleaner venue with limited advertising, generates greater

financial return and corporate partner satisfaction.

Outsourced marketing companies also typically like to work with partners who desire

exclusivity clauses as they are more financially rewarding to the company (Lee, 2000b). If State

Farm Insurance wants to be the exclusive insurance partner for Georgia Athletics, it is going to

have to pay more than Progressive, All State and other rivals. It will then be the only corporate

partner in the insurance category. However, many categories are strategically sub-divided. For

example, the insurance category can be divided into home insurance, health insurance, life

48

insurance and auto insurance sponsorship opportunities. An outsourced company may then form

partnerships with four non-competing insurance companies within those sub-divided categories.

Arizona State University completed a study in 2004 on a small sample size that found

that in intercollegiate athletics, sponsorships are typically formed in the categories of: airlines,

auto parts, beer, credit cards, DSL, gas/oil, health and fitness, long distance, paging devices, and

tires/auto services (Bent, Rode, Rogers, & Whitley, 2004)). The same group also found that

categories frequently ignored include: auto parts, boats/marines, computer hardware/software,

delivery services, department stores, drug stores, electronics, hardware/home improvement,

music stores, pharmaceuticals, personal hygiene, video game systems and video stores. Ignoring

these categories can result in significant lost revenue. Tim Hofferth, president and chief

operating officer of Nelligan sports stresses that outsourced companies cannot ignore pre-

existing business relationships between schools and area businesses as those are additional

sponsorship opportunities waiting to happen (Lee, 2004f).

A final future concern of outsourced marketing is how satellite radio factors into the

outsourced marketing deal. Dave Brown, the head of sports marketing at Ohio State University,

notes that most marketing deals are concerned with local television and radio rights, and that

satellite radio is an untapped revenue stream (Lee, 2004e). Faculty and critics of too much

commercialization in college sports now have another multi-media avenue to contend with in

their battles.

Title IX Implications on Outsourced Marketing

Title IX was designed to help provide better educational opportunities for women. As a

side effect, it has opened the door for women’s participation and resources in sports to grow as

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well. In looking at Title IX relative to intercollegiate athletics, there are 13 points that an athletic

administrator should be thinking about when comparing equity between men’s and women’s

athletics (Carpenter & Acosta, 2005).

1. Whether the selection of sports and levels of competition effectively accommodate the

interests and abilities of members of both sexes

2. The provision of equipment and supplies

3. Scheduling of games and practice time

4. Travel and per diem allowance

5. Opportunity to receive coaching and academic tutoring

6. Assignment and compensation of coaches and tutors

7. Provision of locker rooms, practice and competitive facilities

8. Provision of medical and training facilities and services

9. Provision of housing and dining facilities and services

10. Publicity

11. Recruitment

12. Support services

13. Financial assistance

To date, no one has examined Title IX relative to sports marketing or outsourced

marketing efforts on a college campus that must comply with the federal legislation. In the

economic sense, many athletic administrators may argue that compliance with the marketing

efforts would only hurt women’s athletics. Their philosophy would stand on the premise that

sponsorships are market driven and corporate partners want to associate with the larger crowds

typically found at football games and men’s basketball. Those sponsorship dollars generated

50

from football and men’s basketball can in turn be spent on women’s athletics to better comply

with Title IX.

However, as women’s athletics has continued to grow, schools like Texas, Tennessee and

Connecticut have generated substantial revenue through corporate sponsors (Williams, 2001).

Myles Brand, president of the NCAA, would argue that the promotion and marketing of

women’s athletics falls in compliance with the university mission of overall education and

opportunity for all students on campus (2004). Brand sees the growth of women’s basketball and

softball relative to fan excitement and attendance and notes the rise in female participation at the

high school level as evidence that Title IX’s greatest impact is yet to come. But whether Title IX

will force increased marketing efforts and sponsorships for women’s athletics is yet to be

determined.

Future Trends in Outsourced Relationships

Eitzen (1987) highlights that college sports is market driven. He stresses that expenses

are escalating at a significant rate in the areas of scholarships, salaries, facilities, equipment, and

travel while revenue sources simply cannot keep up. Profits are down for big schools and

deficits are up for smaller schools trying to keep up. And profits do not even include the debt

service that many bigger athletic departments carry. Yet, Li and Burden (2003) note the

continuing expectation of the modern athletic department to be self-supporting. Because of this,

many schools turn to the outsourced marketing option to bring in guaranteed revenue each year.

However, research has found that the schools that outsource share characteristics of a large

overall annual operating budget, large annual operating budget for football and a significant total

expense figure for men’s athletics (Li & Burden, 2003). Given that a limited number of schools

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meet that criteria, outsourced marketing companies continue to evolve their areas of expertise to

include more than just working with schools.

Potential Outsourced Marketing Ventures

Outsourced marketing companies typically work with just one school selling the rights

for that athletic department. However, the companies have started to be creative in its sale of

inventory and come up with new items to sell to corporate sponsors. In Oregon, ESPN Regional

has sold the title sponsorship rights to the annual Oregon-Oregon State football rivalry. The

Civil War, as it is known to fans of both schools, is now presented by the Northwest Dodge

Dealers (Mullen, 1999b). Learfield Sports recently used the 100th anniversary of Indiana

Hoosier Basketball as a national selling point for corporate partners interested in serving as a

sponsor of special edition merchandise, an all-century team and celebratory events throughout

the basketball season (Lee, 2000e). In a different approach that works indirectly with schools,

Nelligan Sports and Host Communications have begun to work with athletic conferences in their

sales efforts (Liberman, 2003b). Nelligan will oversee the sale of the Big East’s and Colonial

Athletic Association’s championship events while ESPN Regional handles Conference USA’s

sales efforts. Host Communications works directly with the Southeastern Conference and the

Metro Atlantic Athletic Conference.

Other places where outsourced marketing companies are expanding their horizons

include facility enhancements and naming opportunities. Georgia Tech worked with ISP Sports

on the purchase of new videoboards and scoreboards that the outsourced marketing company

financed. The additions created new sales inventory for ISP Sports and added greater

entertainment value for the Yellow Jacket fans at the sporting events (Lee, 2001a).

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At the same time, outsourced marketing companies understand that corporate naming

rights are becoming more and more prevalent on college campuses. At the end of 2004,

Learfield Communications acquired an existing company, Team Services LLC, which

specializes in naming right consultation (Liberman, 2005). Team Services previously helped the

University of Maryland secure a naming rights arrangement from Comcast Corporation for $20-

million over 25 years (Lee, 2001j). Team Services has also worked in collaboration with Host

Communications in 2003 to secure naming rights for the on-campus basketball arena at the

University of Texas (Lee, 2003d).

However, other outsourced marketing companies have not been as successful in their

naming rights efforts. After seeing Fresno State sign a 20-year deal for $40 million in 1999

(Lee, 2001j), the University of South Carolina estimated the naming rights of their new

basketball arena to approach $70 million for the duration of the contract (Rofe, 2001). The arena

includes 18,000 seats for home games including 41 luxury suites, 400 club seats and four

additional hospitality suites, each with 50 seats. Non-basketball events have already included a

Bruce Springsteen concert, Sesame Street Live, Champions on Ice and a World Wrestling

Entertainment live event (Lee, 2002d). University officials were nonetheless disappointed and

surprised when Action Sports Media could only generate a 12-year naming rights deal valued at

$5.5 million for the duration of the contract (Lee, 2003f).

In research compiled by the Sports Business Journal by Lee (2003g), the deal paled

relative to recent naming rights agreements with Texas Tech football ($20 million/20 years),

Ohio State basketball ($12.5 million), San Diego State basketball ($12 million), Texas Tech

basketball ($10 million), Washington basketball ($510,000 annually), and UNLV basketball

($500,000 annually). Other naming rights deals on college campuses include Wells Fargo

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paying $5 million over ten years for the Arizona State University Activity Center and Papa

John’s Pizza paying a similar amount for naming rights for a new football stadium at Louisville

(Cohen, 1999b). The Papa John’s Stadium also includes a Brown and Williamson Club level ($3

million) named after a tobacco company and a BellSouth Johnny Unitas Football Museum

valued at $500,000. Cohen noted that the University of Denver also has a Coors Fitness Center

for students’ use after a gift from Denver-based Coors Brewing Company materialized (1999b).

Steinbach found that naming rights typically encompass one-third to one-half of the of the

building’s construction costs (2004a).

Other areas that outsourced marketing companies are exploring include negotiating

pouring rights deal for universities and concession/food service arrangements. In many cases,

school administrators and not athletic administrators will negotiate pouring rights. South

Carolina’s athletic and university administrators worked with Action Sports Media to sign a 10-

year agreement worth $5.6 million with Coca-Cola (Lee, 2001i). The deal eliminated the

presence of Pepsi on campus, the previous pouring rights holder.

From the concessions standpoint, Aramark and Sodexho Marriott Services corner the

intercollegiate food services and have garnered significant revenue based on their commissions.

Other companies are slowly entering the mix including Sportservice Corporation, Boston

Concessions Group and Volume Services America. Aramark indicated in their 2001 prospectus

that within the United States, there is a potential for $17 billion in annual sales and only half of

that is cornered by the major concessionaire groups (as cited in Cameron, 2001). The bidding

amongst companies is much more competitive and outsourced marketing companies believe a

commission could be earned by consulting with schools during the concessionaire selection

process (Lee, 2001e).

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Another venture that outsourced marketing companies have been less reluctant to explore

includes the Internet and the oversight of an athletic department’s website. In comparing

research by the author from 2000 (Zullo) to 2005 (as cited in Johnson, K.), the interest by

outsourced companies in website oversight, maintenance and advertising has decreased. Even

with online streaming video broadcast capabilities, corporate sponsors are not convinced that

advertising on athletic department websites is an effective tool (Steinbach, 2005a). This may

change in future years as the video broadcasts become more comparable to the television

broadcasts.

Another area that outsourced marketing companies might shy away from includes the

licensing aspect of intercollegiate athletics. Though intercollegiate licensing generates over $2.5

billion annually (Conklin, 1999b), it is a specific niche that is well handled by the likes of

Collegiate Licensing Company and smaller competitors. Most schools have an individual that

works directly with the licensing company to make sure the school’s copyrights and trademarks

are used in a tasteful manner. The licensing companies insure that revenue in then coming back

to the schools and not completely into the hands of the vendors selling the goods which can

range from hats and t-shirts to dog houses with the owner’s alma mater logo on the side.

Revenue from licensing can fluctuate depending on the school, their history, their marks and

their success in athletics. When Michael Vick led Virginia Tech to a national championship

game in football, the Hokies’ licensing gross revenue doubled from $340,000 to close to a

million dollars (Lee, 1999).

In similar fashion, outsourced marketing companies are likely to leave the retail industry

to the retail experts. The operation of pro shops and retail stores in athletic facilities, though

profitable, is another niche that is a better fit for other companies (Bynum, 2001b). And though

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many schools have started to outsource their travel plans (Hitcho, 2001), outsourced marketing

companies are staying out of that niche market as well, leaving the transportation issue up to

travel agencies.

One area that remains unexplored is outsourced marketing companies’ presence in arena

management. Presently, there are a few schools including Villanova, Cleveland State, Fresno

State and UNLV that outsource their arena management to major firms like SMG or Global

Spectrum (Steinbach, 2004b). These firms ensure profit maximization by booking concerts and

special events in addition to the athletic and school functions. The firm has the capability of

working directly with concession groups, security, parking and other necessary entities in hosting

more events and generating greater revenue. They might also collaborate with retail stores,

promotional groups that can create fan friendly or kids zones, and the premium seating areas in a

facility including club seats and luxury suites (Bynum, 2001a).

Another unexplored area includes outsourced marketing companies willingness to reach

out to recreational sports, club sports and intramural activities on a college campus. Athletic

facilities on campus that are predominantly used by faculty and students tend to advertise

directly to those groups purely for the sake of getting them into the building (Steinbach, 2002a).

Such facilities are marketed to incoming students as are the recreational events ranging from

yoga classes to rafting trips to intramural basketball. However, corporate sponsorship

involvement was limited. Butterfingers candy bar became a title sponsor of a national flag

football championship in 1994, but only at the final round and not on the campus or regional

sites (Steinbach, 2000).

Steinbach (1999) noted that in recent years Nike, Target, Nestle Crunch and Mentadent

have become more visible on campuses at flag football games. Kellogg’s also teamed with Nike

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to sponsor Nike Nutri-Grain Training & Fitness Program. The program included sponsorship of

campus fitness activities, a rewards program for participants and a national competition among

schools. However, such sponsorships, like their varsity sport partners on campus, have endured

critics who worry about too much commercialization on campus. Directors of the intramurals,

club sports and fitness facilities contend that the corporate financial support helps balance the

budget at a time when money is being pulled from recreational sports and moved to academic

endeavors.

Research also needs to examine outsourced marketing companies’ views on selling high

school athletics as it is a growing opportunity. Forsyth (2000) found that on the local and

regional levels, companies would rather represent interscholastic sporting events instead of

community events like parades or fairs or non-sport sponsorship opportunities like trade shows,

exhibits or festivals. This is because the athletic events occur in great numbers, draw in more

viewers and offer continuous exposure via the local media including television, radio and print

coverage. Forsyth found that sponsorships of high school athletics, much like college sports,

provides corporate partners the opportunity to extend community goodwill, employee goodwill,

image enhancement, increased brand awareness, favorable media exposure, and increased sales.

In addition to sponsorships, corporate involvement and business philosophies have

become more prevalent in interscholastic sports in recent years in other ways. In the past the

local business used to donate free drinks or $100 to a high school booster club. A recent article

in Sports Illustrated found that the state of Texas has an $18.3 million high school football

stadium, complete with a $900,000 scoreboard, and two VIP suites. Another high school

football stadium costs $19.5 million to build and includes a two-tier press box and 950 club seats

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(Menez, 2005). And in Indiana, the Washington Township school officials have just passed the

sale of $50 million in bonds to enhance or construct new high school athletic facilities.

In South Carolina, an outside group earned a 12.5 percent commission or $8,000 through

securing a naming rights deal of $100,000 for a local baseball stadium (Popke, 2002). Popke

also noted that a high school in Texas secured a 10-year deal with Dr. Pepper valued between $3

and $4 million to put the soft drink’s logo on their roof. The school is adjacent to a metropolitan

airport. Grande Communications paid $1.2 million over 25 years for naming rights privileges at

a Texas high school stadium with the Superlative Group, a marketing and naming rights firm,

securing the deal. There is also a 10-year, $2 million naming rights contract in Colorado

between a school district and US West Communications Group to name a new stadium (Cohen,

1999b).

In thinking creatively, Popke (2002) noted that Wells Fargo Bank paid $12,000 over two

years for naming rights to an Arizona Class 4A high school athletic region. And a high school in

Illinois sold their stadium naming rights for $100,000 and a 20-year supply of paint and

maintenance product to Rust-Oleum Corporation. A Maryland SoccerPlex generated $1 million

from Discovery Communications for the naming rights to an on-site indoor facility (Cohen,

2000). Even an elementary school received $100,000 after turning over its gym’s naming rights

to a local grocery chain (Mellinger, 2005).

High schools have also started to sell premium seating as noted with the new Texas

stadiums. And personal seat licenses have appeared in South Carolina with fans pay $25 for

regular seats to five home football games or $30 for premium seats for the game plus a one-time

$100 per-seat fee (Popke, 2002). PSL’s are also a regular commodity in Texas as tickets to

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select high school football stadiums can be scarce (Popke, 2004). Even interscholastic sports are

becoming a booming business.

Where Does It Stop?

The issue of too much corporate involvement and business tactics came to a head in 1998

when a high school student in Evans, Georgia, was suspended for wearing a Pepsi shirt on a

“Coke in Education Day.” The day included all of the school’s students spelling out the word C-

O-K-E in a photo, plus educational seminars and lectures from Coca-Cola executives (Cohen,

1999a). The school was trying to earn a $10,000 prize from Coke and $500 from the local

bottler for their spirit. A better corporate relationship between a Madison school district and

Coca-Cola found the schools in the Wisconsin district earning $1.5 million over three years, a

$100,000 signing bonus, a $5,000 annual teacher of the year award, two $5,000 awards for

students through a marketing competition, two $5/hour internships for students handling Coke

promotional activities, a summer internship for one student and a post-graduate position of

employment for another (Cohen, 1999a).

The fine balance is for high schools to stay away from tobacco and alcohol sponsors and

to insure that the school’s athletic facilities do not resemble a NASCAR vehicle. Whether high

schools will start including sponsor logos on their uniforms, resembling European soccer

leagues, is up to the individual districts and states themselves. While NCAA rules restrict such

logo placement to a miniscule size, there are no rules within interscholastic sports. Universal

Sports America used to be a marketing firm that would specialize in the sale of high school

athletics through offices in Atlanta and Dallas. Their parent company, Bull Run Corporation,

also owned Host Communications (Conklin, 1998). Formerly owned by Tom Hicks the owner

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of the Major League Baseball franchise Texas Rangers, the marketing firm is now known as

iHigh.com, is based out of Lexington, Kentucky, and focuses on marketing to the high school

student consumer through the development of “hip” school websites. But their existence

demonstrates that outsourced marketing efforts have even existed at the high school level.

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CHAPTER THREE

METHODOLOGY

Design of Study

The study involved sending a questionnaire to the general manager at the primary

outsourced marketing company’s property affiliated with select schools in NCAA Division I

conferences. Primary is defined as those outsourced parent companies that handled the school’s

athletic multi-media rights and additional inventory. A small number of schools do have a

second and as many as three or four outsourced companies that assist in handling their sale of

their various inventory including radio inventory, signage inventory, print inventory and more.

However, this study only examines the schools that package their inventory to be sold by one

primary outsourced marketing company.

Host Communication, ISP Sports and other traditional outsourced marketing companies

are frequently called parent companies. Each parent company will have schools that they

directly work with as part of their relationship. For example, Learfield Communications may

work with the University of North Carolina’s athletic department. That extension of the parent

company is called a property and in this case is called Tar Heel Sports Marketing, an extension

of Learfield Communications. Each school’s property has a general manager that oversees that

specific property and reports back to the parent company.

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Selection of Participants

The six major NCAA Division One conferences include: the Atlantic Coast Conference

(12 schools), Big East Conference (12 schools, including four independents), Big Ten

Conference (11 schools), Big Twelve Conference (12 schools), Pacific Ten Conference (10

schools), and Southeastern Conference (12 schools). Each of the six selected conferences is a

member of the Bowl Championship Series, the leader in the Division I-A football post-season

play. Fans, media, and sponsors regard each conference alike as the major and most powerful

conferences in Division I-A intercollegiate athletics (Suggs, 2000). Furthermore, earlier research

by the author has indicated that a majority of schools outside of these six selected conferences

affiliated with the Bowl Championship Series do not have an existing relationship with an

outsourced marketing group (as cited Johnson, K., 2005).

With the six BCS conferences, there are a total of 69 schools. This figure is taken from

their conference alignment for the 2005 football season. It should be noted that historically some

conferences have varied in their membership between sports such as football and basketball.

The Big East is a good example as their 2005 football conference consists of eight schools, but

its basketball conference will consists of ten schools. These numbers also take into account the

recent transition of schools from one conference to another, particularly within the Atlantic Coast

Conference, the Big East Conference and Conference USA. Any I-A independent schools

(schools not affiliated with a conference) participating were added into the Big East Conference

results to insure that its identity is kept confidential with respect to its responses.

The preliminary pilot study by the author found that of the 69 schools, 13 handle their

marketing in-house and an additional 7 were marketing in-house and just reached an agreement

to start a relationship with an outsourced marketing partner in 2005 (as cited in Johnson, K.).

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That leaves 49 schools with outsourced marketing relationships. However, 7 schools use

multiple companies in their outsourced marketing efforts rather than pooling their efforts

bringing the number of included participants down to 42.

The main outsourced parent companies include ESPN Regional, Host Communications,

International Sports Properties (ISP Sports), Learfield Communications, Action Sports Media,

Nelligan Sports, and Viacom Sports. An examination of these companies found an additional 19

schools with outsourced marketing relationships. These 19 schools are not in the six major

conferences but have been included in the study to increase the sample size to 61 and strengthen

the response rate. The questionnaire was then sent to the general managers of the outsourced

marketing companies’ properties affiliated with the combined sample of 61 schools.

Data Collection

A questionnaire was designed by the researcher and was subsequently submitted to four

individuals employed with two major outsourced marketing firms for their review, suggestions,

and concerns. The four peer reviewers are account executives with outsourced marketing

properties that work with schools that are not in the six major conferences. They are not general

managers or assistant general managers and will not be receiving the survey to complete. Hence,

they were able to offer honest and anonymous feedback and critique of the questionnaire. This

helped to eliminate any bias questions or provide clarification of any questions put forth.

Within the questionnaire, section one requested information on the outsourced marketing

property’s demographics including school conference affiliation, size of sales and non-sales

staff, number of females and minorities employed and preferred method of sales. Section two

posed questions that examined the goals of an outsourced marketing property and specific

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contract details between the outsourced property and their affiliated school. These details

included length of relationship with the school and questions regarding inventory items including

what sells the best and what business opportunities are desired in future contracts. Section two

also examined what sponsorship categories are sold and which are ignored while also examining

the relationship a school’s outsourced marketing property may have with an alcohol or gambling

sponsor. Finally, section two addressed cost-cutting measures in outsourced marketing and the

recent Host Communications – University of Kentucky landmark deal.

Section three included questions regarding what sports are sold the most and sold the

least by the outsourced marketing property and the rationale for those rankings. It also examines

the outsourced marketing property’s opinion of Title IX and their willingness to package

Olympic Sports with the revenue sports in future sponsorships. Section four examined the

strengths and weaknesses of outsourced marketing properties while also touching on future

problems in outsourced marketing. The section also asked what level of intercollegiate athletics

that outsourced marketing is a good fit for and whether outsourced marketing should partner with

high school athletics. Section five posed questions regarding the level of satisfaction and interest

in contract renewal with the present school. Finally, section six included a question regarding

the participants’ familiarity of other schools’ marketing agreements.

Procedures

The questionnaire was sent to the general manager or head of the primary outsourced

marketing property affiliated the selected 61 schools. It was expected that the head of the

outsourced marketing property would be the most knowledgeable member of that property and

best suited to completing the questionnaire. Included with the questionnaire was a cover letter

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and consent form. A self-addressed, postage-paid envelope was also provided to increase the

rate of higher return from the participants. Participants were given three weeks to respond to the

questionnaire. Each respondent was also offered the opportunity to learn the results of the study.

Respondents of the study were assured that they would remain anonymous in any publication or

presentation of the study.

Statistical Analysis

Frequencies and descriptive statistics were calculated from the questionnaire results.

Results from the respondents were compared and qualitative responses were also analyzed for

reoccurring themes.

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CHAPTER FOUR

RESULTS AND OBSERVATIONS

The purpose of this study is to examine outsourced marketing in Division I intercollegiate

athletics from the outsourced marketing properties’ perspective. An analysis of the respondents’

answers can help improve future outsourced relationships from a financial standpoint, addressing

areas that may need future consideration within the context of higher education.

Included below and on the subsequent pages are the respondents’ collective answers to

the questionnaire sent to the outsourced marketing properties. Twenty-eight of sixty-one

questionnaires were completed for a 46% response rate. Questions are listed in the order they

appeared in the questionnaire. Fifteen separate headings have been inserted to group questions

into categories for clearer initial observation. Conclusions and future recommendations are

addressed in chapter five.

Demographics

The greater percentages of respondents completing the survey were either the head

(general manager) of their outsourced property or the second-in-command assistant general

manager. Learfield Communications, ISP Sports and Host Communications remain the parent

companies affiliated with the most number of schools as previously noted in the literature

review. As expected, most respondents were affiliated with the six power conferences that form

the Bowl Championship Series. Surprisingly, 89% of the responding outsourced properties had

at least one employee who previously worked with a NCAA member school or conference. In

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fact, of the properties responding, 68% employed at least two individuals who previously worked

with a NCAA member school or conference.

1. Job Title or Position Respondents Maintain in Outsourced Marketing Property 23 General Manager 2 Assistant General Manager 2 Account Executive 1 Director of Collegiate Properties 28 28/61 = 46% response rate

2. Name of Outsourced Parent Company That Employs the Respondent 9 Learfield 6 ISP Sports 5 Host Communications 3 ESPN Regional 2 Viacom 2 Learfield/ISP 1 NR

3. Athletic Conference Affiliation of the Respondent’s Property 7 ACC 5 SEC 4 Big Ten 4 Big Twelve 4 Conference USA 1 Big East 1 Pac Ten 1 MWC 1 WAC

4. Within the Respondent’s Property - Number of Individuals Previously Employed by NCAA Member Institution or Conference 2 Zero Individuals 6 One Individual 11 Two Individuals 6 Three Individuals 2 Four Individuals 1 NR

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Staffing and Sociological Implications

In examining the sales and support staffs of the outsourced marketing properties, a few

observations stand out. Most properties (86%) have three or more individuals handling the sales

efforts. In tallying the number of individuals that all the outsourced properties assigned to the

sales effort, the total reaches 109 salesmen. The phrase sales “men” is appropriate as only 23

(21%) are females. Less than 4% of the 109 salesmen in sales are racial or ethnic minorities.

5. Size of Sales Staff at the Respondent’s Property 3 Two Individuals 6 Three Individuals 9 Four Individuals 6 Five Individuals 2 Six Individuals 1 Seven Individuals 1 NR

6. Number of Females Active in Sales 11 Zero Females 11 One Female 3 Two Females 2 Three Female 1 NR

7. Number of Minorities Active in Sales 22 Zero Minorities 4 One Minority 2 NR

In examining the staff members with non-sales duties, most properties (76%) assigned

two people or less to handle these responsibilities. In tallying the number of individuals that the

properties assigned to non-sales duties, the total reaches 37 people. Of this number 23 (62%) are

females. This raises the concern of stacking females in non-sales positions of limited power and

white males in sales roles that garner greater control, prestige and opportunities for advancement.

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8. Size of Staff with Non-Sales Duties at the Respondent’s Property 8 Zero Individuals 7 One Individual 7 Two Individuals 2 Three Individuals 0 Four Individuals 2 Five Individuals 1 NR 1 Outlier response of 30-15-4

9. Number of Females with Non-Sales Duties 10 Zero Females 10 One Female 5 Two Females 1 Three Females 1 NR 1 Outlier response of 30-15-4

10. Number of Minorities with Non-Sales Duties 22 Zero Minorities 4 One Minority 1 NR 1 Outlier response of 30-15-4

Of the respondents, 61% indicated that their property had a demonstrated history of

advancement for females and minorities. Though those who expanded on their answer indicated

that some females do hold high-ranking positions, the collective responses indicated that many

females may be stuck with responsibilities that are not sales related. The responses and minority

figures also indicated that there is not enough done to enhance minorities and their advancement

in outsourced marketing.

11. Does Parent Company Have Demonstrated History of Advancement for Females and Minorities? 8 No 17 Yes 3 NR

12. Of 17 yes responses, 11 expanded their answers GM and director positions at Kentucky and FSU We have had GM's at two additional colleges and universities that were female. We have two female GM's and VPs.

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ESPN Diversity Initiative Actively pursuing would benefit property in doing so. We have female VPs, Associate GMs and GMs. We have two female VPs, one assistant VP and a general manager. GM of Gamecock Sports Properties. Females have a good track record at Learfield in the sales area and support staff. Female GMs have been put in place, plus we aggressively pursue female account executives. ESPN is very fair and strongly encourages diversity.

Sales Efforts and Motives

In conducting their sales efforts, most outsourced properties focus on personal selling

efforts as their means of reaching out to potential partners or sponsors. Telemarketing and using

a database are secondary methods of soliciting sponsors or partners. These sponsorships or

partnerships are secured for the primary purpose of generating revenue for the overall parent

company. As noted earlier, this revenue is ultimately shared with the affiliated institution of

higher education’s athletic department. It should be noted that the respondents indicated that

outsourced properties focus on sales and not on the business of enhancing an athletic

department’s marketing or promotional efforts. The outsourced properties responding also did

not indicate a willingness to boost ticket sales or create awareness for the athletic department.

The outsourced marketing property’s primary focus is meeting the guarantee promised to the

athletic department. After that goal is met then the secondary focus becomes trying to bring in

additional revenue beyond that initial guarantee.

13. Property's Best Method of Soliciting Sponsors/Partners/Clients 1 2 3 4 5 NR Personal Selling 26 1 0 0 0 1 Database 0 8 8 2 1 9 Direct Mail 0 0 2 13 3 10 Telemarketing 1 9 4 3 2 9

Others RankingReferrals (2) 2, 3 Networking 3

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Events Alumni 5 Call in 5

14. Primary Goals of Outsourced Marketing Properties

1 2 3 4 5 6 7

NR or NA

Additional Revenue 8 18 1 1 Guaranteed Revenue 19 7 2 Match or Better Success Elsewhere 0 3 3 7 9 1 5 Enhance Marketing & Promotions 0 1 10 9 3 0 1 4 Increase Ticket Sales 0 2 3 7 9 2 5 Increase Awareness for Athletic Dept. 0 7 7 6 2 1 5 Others Revenue Sharing 1 Expanded Qualified Staff 0 1 Better Service 0 1 Relationship is also important, confident we do an outstanding job in supporting athletic department's annual priorities 0 1

Duration of Relationship and Success Rates

Of the outsourced properties responding, 42% have been working with their current

school for over six years and 54% have worked with their school for less than six years. Twenty

of the twenty-eight properties have successfully met their financial guarantee to the school’s

athletic department throughout the duration of the relationship with the remaining eight

respondents choosing to not answer the question. Of those eight, the next question indicated that

two of them have failed at least once to meet its financial obligation to the school’s athletic

department. That is collectively a success rate of greater than 90% for the outsourced marketing

properties. That figure could be improved even further if the two times properties failed to meet

the financial guarantee were divided by the total cumulative number of years the outsourced

properties have collectively worked with schools’ athletic departments. That could be asked on

further questionnaires to formulate a better quantitative success vs. failure rate for outsourced

marketing properties meeting the financial guarantee.

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15. Number of Years Property Has Worked with School 7 Zero through Two Years 2 Over Two through Four Years 6 Over Four through Six Years 2 Over Six through Eight Years 2 Over Eight through Ten Years 8 Ten-Plus Years 1 NR

16. Number of Years Property has Successfully Met Financial Guarantee 6 Zero through Two Years 2 Over Two through Four Years 4 Over Four through Six Years 2 Over Six through Eight Years 2 Over Eight through Ten Years 4 Ten-Plus Years 8 NR

17. Number of Years Property has Failed to Meet Financial Guarantee 18 Zero 0 Once 2 Twice 8 NR

Creativity and Marketing Trends

Outsourced marketing properties felt highly comfortable in their ability to piece together

creative inventory for the sponsors and partners to choose from when forming sponsorship

packages. Though the focus of the outsourced marketing is predominantly on sales, the

properties were also satisfied with their ability to stay familiar with current marketing trends in

other areas of sports, not limited to just intercollegiate athletics. Responses to future questions

indicate otherwise.

18. Property's Ability to Piece Together Creative Inventory for Sponsors/Partners/Clients 24 High Level of Satisfaction 3 Moderate Level 0 Low Level 1 NR

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19. Property's Ability to Stay Knowledgeable with Current Marketing Trends in Sports 23 High Level of Satisfaction 4 Moderate Level 0 Low Level 1 NR

What Inventory Sells

In examining what inventory items are sold most by the outsourced properties, the

respondents cited radio broadcast of games and permanent signage at athletic facilities as the best

selling inventory. Videoboard advertising and ribbon signage at athletic facilities are other top

seller on the second tier of inventory, along with gameday promotions and print media. A third

tier of inventory would consist of coaches’ radio shows, coaches’ TV shows, corporate

hospitality, and the athletic department’s internet advertising rights. Surprisingly, the idea of an

interactive marketing area or fan zone that is increasingly being found at professional sporting

events has not caught on as a popular inventory item at the college level yet. This may be due to

the greater expense of such a project relative to the production of a radio commercial or one time

cost of making a sign to display in an arena or stadium. An interactive area or fan zone’s costs

and expenses could offer a lower financial return on investment for the outsourced marketing

property.

20. Best Selling Inventory Items

1 or 2 3 or 4

5 or 6

7 or 8

9 or 10

11 or 12

13 or 14

15 or 16 17 NA

Radio Broadcast of Games 17 6 5 Coaches Radio Show 4 1 8 5 2 6 Coaches TV Show 1 1 3 5 6 3 6 Internet 0 2 5 11 3 3 1 3 Signage 16 9 2 Video Board/Ribbon 6 13 5 1 1 2 Print Media 1 7 7 9 3 1

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Game-day Promotions 2 8 11 4 2 1 Corporate Hospitality/Village 1 2 9 7 5 2 1 1 Interactive Marketing Area/Fan Zone 1 1 3 3 9 2 1 1 7 Real Streaming/Video-Internet 0 1 4 8 3 12 Concession/Pouring Rights 2 1 4 2 1 1 16 Licensing 0 1 2 5 1 3 15 Kids Club 0 4 5 5 3 10 Naming Rights for Facilities 0 1 2 1 1 22 Naming Rights for Tournaments 0 1 1 5 3 2 15 Others Television broadcasts 1 4 Association 1 Credit Card Affinity 0 1 Suites 1 Corporate Marketing (Official Sponsor Title, Presenting Games 1

With regards to which business opportunities the outsourced properties would like to gain

greater control over for future financial transaction three areas stand out: the credit card affinity

program (frequently held by athletic departments in conjunction with an alumni association), the

school’s pouring rights contract (frequently held by the school and not the athletic department)

and the opportunity to secure naming rights for athletic facilities.

21. Business Opportunities You Would Like to Acquire and Sell in Future Contracts 12 Credit Card Affinity Program 10 Pouring Rights 10 Naming Rights for Facilities 8 Apparel 7 Licensing 7 Real Steaming/Video-Internet 6 Chairbacks/Seat Cushions for Facilities 5 Corporate Hospitality/Village 5 Concessions 5 Fan Reward Program 4 Interactive Marketing Area/Fan Zone 3 Student Recreation/Activity Center 2 Premium Seating 2 Premium Parking

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2 Tournament Management 2 Intramurals and Club Sports Others 1 Internet 1 Radio Rights 1 All Videoboard Advertising

In examining the last three years, respondents were able to identify which sponsorship

categories have been filled by the outsourced marketing property. The left column list the

answers as they appear on the questionnaire. The right column list the sponsorship categories

based on frequency. It is not surprising that 71% of the respondents maintained some form of

sponsorship in the categories of sit-down restaurants, fast food, hotel, soda/cola, banking,

cellular service provider, car insurance, hospital/medical center, grocery store, automobile brand,

life insurance, pizza and airlines. What is notable is the wide range of categories left unfulfilled

by outsourced marketing properties.

22. Sponsorship Categories Successfully Filled in Last Three Years (as appears on questionnaire) (ranked by frequency) 26 Fast Food 27 Other Restaurants (sit-down) 17 Subs and Sandwiches 26 Fast Food 27 Other Restaurants (sit-down) 25 Hotel 17 Sports Bar 24 Soda or Cola 2 Coffee Shops/House 24 Banking 20 Pizza 24 Cellular Service Provider 25 Hotel 24 Car Insurance 24 Soda or Cola 24 Hospital/Medical Center 14 Water 24 Grocery Store 4 Juice 23 Automobile Brand 24 Banking 22 Life Insurance

17 Investment Firm or Financial Advisors 20 Pizza

12 Credit Card 20 Airlines 1 Credit Counseling/Debt Consolidation 19 Car Dealership 4 Tax Services 19 Health Insurance 16 Phone Service 17 Subs and Sandwiches 24 Cellular Service Provider 17 Sports Bar 11 Internet Service Provider 17 Investment Firm or Financial Advisors 1 Satellite Television 17 Lottery 4 Video/DVD Rentals 16 Phone Service 2 Movie Theaters 16 Real Estate 1 Music Stores 15 Fuel/Gasoline

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5 Camera 15 Shopping Mall/Department Stores 3 Film 15 Retailer (Ex. Walmart) 2 Batteries 14 Water 15 Fuel/Gasoline 14 Convenience Store 6 Motor Oil 14 Television Media 10 Tires 12 Credit Card 14 Convenience Store 12 Health and Fitness Clubs 23 Automobile Brand 12 Athletic Apparel 10 Automobile Repair 11 Internet Service Provider 19 Car Dealership 11 Print Media 3 Boats and Marine 10 Tires 20 Airlines 10 Automobile Repair 3 Train 10 Power Supplier 19 Health Insurance 10 Hardware or Home Improvement 24 Car Insurance 10 Dairy 22 Life Insurance 10 Snacks/Potato Chips 24 Hospital/Medical Center 10 Sporting Goods Store 1 Drug Stores 9 Military 5 Pharmaceutical 8 Computer Website (Ex. Yahoo) 16 Real Estate 8 Delivery Services 10 Power Supplier 6 Motor Oil 10 Hardware or Home Improvement 6 Athletic Equipment 4 Tools or Power Equipment 6 Clothing Line 12 Health and Fitness Clubs 6 Footwear Line 12 Athletic Apparel 6 Electronics Store 6 Athletic Equipment 5 Camera 2 Computer Software/Hardware 5 Pharmaceutical 2 Computer Brand 5 Office Supply Store 8 Computer Website (Ex. Yahoo) 5 Casino 0 Video Games 4 Juice 24 Grocery Store 4 Tax Services 10 Dairy 4 Video/DVD Rentals 3 Chocolate 4 Tools or Power Equipment 2 Candy 3 Film 1 Cereal 3 Boats and Marine 3 Coffee 3 Train 10 Snacks/Potato Chips 3 Chocolate 1 Desserts 3 Coffee

2 Men's Health/Beauty incl. shaving/deodorant 3 Philanthropy/Community Service

1 Women's Health/Beauty incl. shaving/deodorant 2 Coffee Shops/House

1 Perfume/Cologne 2 Movie Theaters 0 Pain Reliever 2 Batteries 1 Soap 2 Computer Software/Hardware 15 Shopping Mall/Department Stores 2 Computer Brand 6 Clothing Line 2 Candy

6 Footwear Line 2 Men's Health/Beauty incl. shaving/deodorant

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15 Retailer (Ex. Walmart) 1 Credit Counseling/Debt Consolidation 10 Sporting Goods Store 1 Satellite Television 5 Office Supply Store 1 Music Stores 6 Electronics Store 1 Drug Stores 0 Children Toys Store 1 Cereal 8 Delivery Services 1 Desserts

11 Print Media 1 Women's Health/Beauty incl. shaving/deodorant

14 Television Media 1 Perfume/Cologne 5 Casino 1 Soap 17 Lottery 0 Video Games 3 Philanthropy/Community Service 0 Pain Reliever 9 Military 0 Children Toys Store Others Others 1 Public Utilities 1 Public Utilities 1 Cable TV 1 Cable TV 1 Service Lube 1 Service Lube 1 Isotonic-Gatorade 1 Isotonic-Gatorade 1 Auto parts store 1 Auto parts store 1 Beer 1 Beer 1 Satellite Radio 1 Satellite Radio

Respondents were also afforded the opportunity to offer their input regarding what

categories may play a greater role in the future. There was no conclusive observation to be made

as the responses from the outsourced marketing properties widely varied.

23. What Categories Do You Foresee Playing a Greater Role in the Future? Petroleum Home improvement Banking Credit cards Wireless Pharmaceutical Satellite TV/Cable Telecom bundles Satellite radio Gas Auto Hardware Technology Lottery Fuel Home Builders Insurance Food Vendors

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Auto Manufacturers Grocers Cell Phone Hospitals Computer websites Apparel

Restricted Corporate Sponsorships

In addressing the issue of restriction in forming a sponsorship with alcohol sponsors, the

outsourced properties indicated that most will keep their partnership simple through a radio

commercial or mention or something comparable on the coaches’ radio shows. There may also

be an ad in a game program or on another print item, but signage and giveaway items from

alcohol sponsors is limited. The philosophy is such that the alcohol sponsors are there in a subtle

fashion relative to other sponsors that might have more signage, hospitality and a more visible

relationship with the athletic department as a corporate partner. The majority of the outsourced

properties (68%) indicated that their school’s athletic department did place restrictions on the

outsourced properties’ ability to sign sponsorships with alcohol sponsors. If such restrictions

were lifted, outsourced properties stand to gain significant revenue but at what price to the parent

company, the property, the athletic department and the school itself?

24. Existing Relationship with Alcohol Sponsors/Partners/Clients 18 Radio Broadcast of Games 11 Coaches Radio Show 11 Print Media (Game Programs, Ticket Backs, Posters, Schedule Cards, Cups) 7 Coaches Television Show 7 Tickets and Hospitality 6 None 6 Signage 4 Video Board/Ribbon Advertising

2 Game-day Promotions (including promotions at pre-game, half-time, time-outs, souvenir giveaways)

1 Internet 1 Concession and Pouring Rights 1 Naming Rights for Tournaments Others

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2 Television Broadcast of Games 1 Logo Rights

25. With What Alcohol Company Do Your Hold a Relationship? 19 Anheuser-Busch 5 Miller 2 Coors 1 Presidente 1 Barcardi 6 NR

26. Are Alcohol-Related Sponsorships Restricted by Your School? 19 Yes 9 No

27. If Yes, Would You Increase Revenue if Such Restrictions Were Lifted? 14 Significantly 3 Moderately 2 Not Really

Despite the NCAA’s strong concerns with gambling, particularly as it pertains to student-

athletes, many schools still enable their outsourced properties to form relationships with the

lottery or casino sponsors. While 11 properties have no affiliation with a lottery or casino

sponsor, 46% of the companies do hold such a relationship. The greater percentages of those

relationships are state-lottery sponsorships. The relationship is usually in the form of a radio

commercial or permanent signage at an athletic facility. If restrictions on such sponsorships

were lifted by many athletic departments, it is inconclusive if outsourced marketing properties

would see a significant increase in revenue.

28. Existing Relationship with Lottery or Casino Sponsors/Partners/Clients 13 Radio Broadcast of Games 11 None 9 Signage

8 Print Media (Game Programs, Ticket Backs, Posters, Schedule Cards, Cups)

8 Tickets and Hospitality 6 Coaches Radio Show

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6 Coaches Television Show

6 Game-day Promotions (including promotions at pre-game, half-time, time-outs, souvenir giveaways)

5 Video Board/Ribbon Advertising 2 Naming Rights for Tournaments 1 Internet Others 2 Television Broadcast of Games

29. What Type of Lottery or Casino Sponsor/Partner/Client Is It? 14 State-supported Lottery 5 Casino 0 Internet Gambling

30. Are Lottery or Casino-Related Sponsorships Restricted by Your School? 16 Yes 12 No

31. If Yes, Would You Increase Revenue if Such Restrictions Were Lifted? 6 Significantly 7 Moderately 2 Not Really 1 NR

Current Trends and Issues in Outsourced Marketing

One portion of the questionnaire simply put forth the question of what school would the

outsourced property most like to work with in an outsourced marketing relationship. Given that

Ohio State University is one of the premier athletic departments in the country and they do not

currently have a primary outsourced marketing property or relationship with a prominent parent

company, it was not surprising that the Buckeyes received the greatest number of mentions.

When respondents were asked which schools have the best relationship with their outsourced

marketing property, it was surprising that Big Twelve Conference member Missouri led the way.

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This despite the Tigers not being a frequent contender for national championships or a

recognized leader in high attendance figures at its sporting events.

32. Which School Would Be Most Advantageous to Acquire for Outsourced Marketing? 8 NR 8 Ohio State 4 Texas 3 BCS Schools 3 Michigan 3 Florida 2 Tennessee 2 Notre Dame 2 Nebraska 2 Georgia 1 Oklahoma 1 Washington 1 Auburn/Alabama dual property Others 1 Depends on the area

1 Business decision based on company's objectives and goals

33. Which School Do You Believe Has the Best Relationship With Their Outsourced Marketing Property? 6 NR 5 Not Sure 4 Missouri 3 Tennessee 2 Oregon 2 UNC 2 Wake Forest 2 Texas 2 Oklahoma 1 Iowa 1 Wisconsin 1 Memphis 1 Georgia 1 Kansas 1 Virginia 1 Kentucky 1 Marshall 1 Miami

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While the University of Kentucky – Host Communications deal sent financial

shockwaves to athletic directors around the country with regards to the financial value of the

deal, outsourced marketing properties were not as surprised as expected. Whether the old

Kentucky – Host Communications deal was undervalued can not be determined, but it is possible

that the financial value of outsourced marketing relationships around the nation will increase

after schools finish their initial contract with an outsourced marketing property and parent

company. It is plausible that schools made rookie financial errors the first time around and will

be better prepared to structure an improved deal in their second efforts in negotiating with

outsourced marketing parent companies.

34. What is Your Reaction to the New Host Communications - University of Kentucky Partnership? 7 Significantly Surprised 13 Moderately Surprised 7 Not Really Surprised

Public vs. Private Debate

The outsourced marketing properties gave no clear-cut indication of whether it was easier

to work with a private institution or public institution. For those who chose the private school,

the reoccurring theme tended to be less restrictions and more efficiency in the relationship

between the outsourced property, sponsors and the school. For schools choosing the public

school path, it tended to be because of the idea that public schools may be bigger with a larger

fan base, thereby being more appealing to corporate sponsors. Why sponsor a Duke University

with a limited fan base and alumni that leave the state, when you can support the athletic

programs at the University of North Carolina in Chapel Hill with a bigger fan base, student body

and increased number of alumni?

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35. Is it Easier to Work With a Public or Private Institution? 7 Public 10 Private 11 NR

36. Why Private Institutions? More flexibility, quicker decisions Public institutions have to follow state mandates while private institutions control inventory more freely Less red tape, quicker decisions Not the same scrutiny by media and alumni at private institutions Lack of state regulations, easier paperwork No state red tape to deal with Less restrictions Less restrictions Bid laws Loss of state bid requirements which complicate and slow down the business process

37. Why Public Institutions? I have worked in a private institution and it was not easy Bigger dreams, bigger money Public schools usually have a larger fan base and typically fund athletics better Usually larger schools with growing number of fans Public has more advantages with guidelines in place

38. Other Responses Both have pros and cons, but the importance is to understand the school's philosophy on sponsorship sales Depends on athletic director No real difference Either way, expect a challenge

Expense Reductions in Outsourced Efforts

In asking the outsourced properties where they can best reduce expenses that can offset

their efforts to meet any financial guarantee to a school, there was no single overwhelming

response. Some respondents indicated a desire to reduce the guarantee paid to the schools, while

others wanted to cut on ticket costs for the tickets frequently allocated to sponsors within a

sponsorship package. Printing costs was a third area mentioned where outsourced properties

could reduce their annual expenses.

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39. Areas You Would Like to See Your Property Reduce Expenses 8 Guarantee to School 7 Tickets 6 Printing Costs (rate cards, brochures, mailers) 4 Travel 4 Inventory Expenses 4 Extending TV/Radio Network 3 Corporate Hospitality 2 Office Space 2 Staff/Personnel Other 2 Production Costs

What Sports Sell, What Sports Are Ignored

In asking outsourced marketing properties what sports sold well when working with

corporate sponsors or partners, the overwhelming response indicated football first and men’s

basketball second. Women’s basketball was a second tier sport and a few respondents indicated

that baseball could work too. However, football and men’s basketball sold the best because that

is what the sponsor/partner demanded in the sponsorship package first and it was demanded

based on the historical perception of greatest return on investment value. Other sports simply did

not offer a significant return on interest, sponsor interest or a past history of success in sales.

This was especially true of Olympic Sports and women’s athletics excluding women’s

basketball. And while Iowa may sell wrestling season tickets, Syracuse sells men’s lacrosse

season tickets and North Carolina sells women’s soccer season tickets, these are the exception

and not the norm. Low regular attendance at Olympic Sporting events equates to low return on

investment from the sponsor perspective.

40. Top Three Sports Outsourced Properties Sell 1 2 3 4 5 6 7 8 Football 18 9 1 Men's Basketball 10 18 Women's Basketball 1 1 14 8 1 Baseball 0 8 10 2 2 1

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Men's Soccer 0 1 1 4 5 1 3 Women's Soccer 0 3 6 4 5 2 Ice Hockey 1 1 1 2 2 Others Volleyball 0 4 1 Gymnastics 0 1 1 Lacrosse 0 1 5 Wrestling 0 1

41. Reasons for Selling Such Sports 1 2 3 4 NA History Indicates Success in Sales 3 6 13 3 3 Sponsor/Partner/Client Demand 22 5 1 Greater Return on Investment 3 12 10 3 Others Winning 1 Fan Interest 0 1 Image Association/Perception 0 1

42. Top Three Sports Outsourced Properties Do Not Sell 1 2 3 4 5 6 7 8 9 10 11 12 NA Field Hockey 2 1 1 1 1 1 21 Gymnastics 1 2 2 1 2 1 1 3 15 Golf 7 1 2 1 1 2 2 12 Lacrosse 3 1 3 1 2 1 1 17 Men's Soccer 1 3 4 2 1 1 2 14 Women's Soccer 1 5 2 3 5 2 3 7 Softball 2 1 2 3 3 1 2 1 1 2 10 Swimming 2 4 4 1 1 2 14 Tennis 3 4 2 1 1 1 1 1 2 11 Track and Field 3 4 3 1 2 2 12 Wrestling 1 1 1 2 2 1 1 1 2 17

43. Reasons for Not Selling Such Sports 1 2 3 4 NA/NR History Indicates Poor Sales 3 3 16 2 4 Lack of Sponsor/Partner/Client Demand 20 5 3 Least Return on Investment 5 13 6 4 Others Lack of attendance = no one for sponsor to reach 1 Image association/perception 0 1

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Title IX and Outsourced Marketing

In looking at the responses of outsourced marketing properties with respect to Title IX,

properties demonstrate a varying range of concern for the federal mandate within their sales

efforts. While properties would be willing to package Olympic Sports or women’s athletics with

a revenue sport like football or men’s basketball, the company does not want to force it on their

sponsors or partners. The outsourced property would rather address the issue on a case-by-case

basis. Many respondents noted that sticking the sponsor or partner with a sport that is not well

attended just does not make financial sense to the sponsor. At the same time, the expenses of

such additions deters from the financial return on investment often found in sponsorships with

football and men’s basketball.

The answers put forth by the respondents indicate that Title IX is the issue of the

institution and that outsourced properties should focus just on their sales efforts and meeting the

financial obligations. What the institution chooses to do with the financial guarantee is up to the

athletic department as that is money that could offset many Title IX expenses if used properly.

44. Outsourced Property's Awareness/Concern for Title IX Within Sales Approach and Operations 3 Very High Concern 6 High Concern 8 Moderate Concern 5 Low Concern 4 Very Low Concern Others

1

We are aware of Title IX and share concerns with our partners but it does not spell out for equity in sponsorship generation

1 NR

45. Should Title IX Be an Issue When Your Property is Soliciting Sponsors/Partners/Clients? 4 Yes 14 No 8 Case-by-Case Basis 2 NR

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46. Would You Be Willing to Package Your Revenue-Sports with Olympic Sports and Women's Athletics? 20 Yes 1 No 7 Case-by-Case Basis

47. Would Your Corporate Partners Be Receptive to Such an Idea? 5 Yes 2 No 21 Case-by-Case Basis

48. Concerns/Issues Corporate Partners Might Have with Packaging They (sponsors) see little value Low exposure and ROI Lack of ROI, no exposure in Olympic Sports due to low attendance Extra cost may not justify project ROI Additional expenses Small ROI for sponsor, lack of time/interest to activate, additional costs History has shown no one is watching or listening Lack of interest/exposure Low attendance, not reaching consumer Not interested, low ROI Are they (sponsors) getting value? Poor ROI Additional money Depends on fans' interest. No fans = no eyeballs or ears to see/hear a sponsor's message. 200 fans/game is not a valid marketing vehicle Not as much impact. Our local sellers specialize in minor sports as local residents pertain to that category. If it's added value, OK. But many (sponsors) do not want to purchase or fulfill commitment with these Olympic Sports if not interested. Low attendance, fan apathy. Little fan interest and low ROI Cost vs. Return - Bottom Line Some (sponsors) are receptive because there's a fair value associated. Others are media-driven and want nothing to do with it. (Poor) Attendance and ratings not worth it.

49. Concerns/Issues Outsourced Property Might Have with Packaging Promotions office always wants "stuff" in these sports which most sponsors don't want to pay for. Low exposure and ROI Low demand and minimal ROI Why package these low ROI sports in with the big ones when you can increase the big sports package dollars and give your client a better ROI? Additional expenses The sponsor is paying for something they don't want. Sales margins are too small, time/expense costs too high, sponsors don't like

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having sports pushed off on them. Implementation/staffing Takes away from other sales opportunities. Extra work for little return Value perceived by corporate sponsors It has to make sense. The fit has to be there Money would go to Olympic Sports and take away from revenue sports No value = won't add to revenue but fulfillment costs still exists A prospective sponsor would not see Olympic Sports as a bonus due to the very low attendance patterns and lack of radio broadcast. Extra costs, operationally and with staff Sales people can't waste time on sports that don't sell Can we afford to do it? Can we sell it and sell it at a level which offsets the required investment? Know that a sponsor may not want them and they like won't generate much money for outsourced company/athletic department.

Strengths and Weaknesses of Outsourced Marketing

The primary goal of outsourced marketing properties is to make revenue or earn money

for their school’s athletic department. Hence, it is not surprising that respondents noted that the

major strength of outsourced marketing properties include revenue generation with service

quality ranking second. As expected, the weaknesses of outsourced marketing properties range

from lack of control over content to lack of interest and promotion for certain sports. However,

respondents did indicate a wide range of areas aside from the financial guarantee where

outsourced marketing properties are beneficial to institutions of higher education.

50. The Major Strengths of Outsourced Marketing 1 2 3 4 5 6 7 8 9 10 11 NA Service Quality 5 9 5 2 3 2 1 1 Guaranteed Revenue Source 16 1 7 1 1 2 Additional Funding Beyond Guarantee 1 10 2 6 1 2 1 5 Better Public Promotion of Athletics 0 1 2 2 2 3 4 5 3 1 1 2 More Modern Advertising of Athletics 0 5 1 5 4 4 3 1 1 4 Enhanced Radio/TV/Internet Maintenance 1 1 3 3 10 1 3 1 1 1 3 Well-rounded Coverage of All Sports 0 1 2 2 7 4 8 1 3 Help Pay for Scoreboard or 0 2 3 3 1 2 3 3 2 4 1 4

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Capital Projects Less Bureaucracy for Athletics 0 2 2 3 3 4 3 4 3 2 2 Good People 0 2 1 1 5 3 3 3 1 1 1 3 Other Attention to universities directives 0 1

51. The Major Weaknesses of Outsourced Marketing 1 2 3 4 5 6 7 8 9 10 or 11 NA Lack of Control Over Content 5 1 2 1 1 1 1 1 Poor Communication with In-House Marketing Group 1 1 1 1 3 1 2 1 Inconsistency in Marketing Sales 1 1 2 1 1 1 3 1 1 Lack of Promotion of Olympic Sports 3 4 1 1 2 2 2 1 Lack of Interest for Certain Sports 4 5 1 1 2 2 Different Goals from Athletic Department 2 1 2 3 2 1 2 Sales Conflicts with School History/Traditions 0 3 2 5 1 2 1 1 Sales Agreements Conflict with Academic/Faculty Views 1 2 3 2 1 3 Others No control over wins and losses 1 Too early to tell 1 1 Lack of office space 1 Challenge of AD bringing old school ways up to date challenging for sponsors 0 1

52. Other Areas Your Outsourced Marketing Property Benefits The Institution It Represents Support academic mission by employing interns as well as supporting marketing and promotions through sponsorships Scoreboard donation, commercial inventory (radio/TV) to school and athletic department Quality broadcasts and print Contributions to athletic scholarship fund Ticket sales, cost savings, workload reduction, donations Student groups, internship opportunities, oversight of spirit groups and the band Promotional activities, game day enhancements, equipment service/support for teams and the department Increased number of promotional events which help game day attendance/presentation Largest ticket customer, national exposure, largest corporate tent purchaser, $75,000 annual donation, support fundraisers Sharing of ideas with other universities Huge contribution to scholarship fund via assured seating donation associated with all

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premium season ticket purchases Reduction of expenses for athletics, positive image for athletics by professional sales staff Student groups, spirit teams We attempt to be an extension of the University's administration. We are a positive image consultant for the University in the marketplace. End product quality is very important to the University. We deliver that on a consistent basis and that is sizable burden lifted from the AD and his staff. University's athletic priorities are our priorities.

Future Problems, Best Fit Issue and High School Athletics

As noted earlier, outsourced properties would like to cut expenses to athletic departments

particularly in the way of financial guarantees. Hence, it should not be surprising that the

respondents indicated that the biggest future problem in outsourced marketing is too great of a

financial guarantee for a school, one that an outsourced marketing parent company may have

trouble meeting on an annual basis. Secondary problems include clearly demonstrating a return

on investment for sponsors, an oversaturation of the marketplace with sponsorships, and turnover

in sales personnel. Tertiary concerns include ambush marketing, faculty concerns of

overcommercialization, increased operational expenses, problems in evaluating the relationship

with a sponsor or client, and lack of control over the inventory and sponsorship content.

53. Biggest Future Problems of Outsourced Marketing #1

Prob. Others 14 20 Too great of a guarantee for school

1 6 Frequent change in institution's outsourced marketing company

4 12 Turnover in sales personnel 5 Pooling several schools with one sponsor/partner/client

1 11 Lack of control over inventory 8 Lack of control over content

1 6 Time demand of sales 6 Variable pricing 6 Meeting the needs of Olympic Sports and Women's Athletics

5 19 Demonstrating return on investment for sponsor/partner/client

12 Evaluating relationship with sponsor/partner/client 1 6 Different goals than that of the athletic department 2 13 Increased operational expenses 3 10 Ambush marketing

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3 Helping academic mission 3 Contributing to scholarship funds 4 Media inquiries or Open Records Act

4 14 Market cannot bear any more sponsorships 7 Big market, small market issues 9 Faculty concerns of overcommercialization Other

1 Restrictions on types of sponsorships/companies In asking the outsourced marketing properties what level of intercollegiate athletics

outsourced marketing is best suited for, the overwhelming response supported Division I-A

schools and conferences. Lower levels of intercollegiate athletics simply did not catch the

interest of outsourced marketing properties. It is hypothesized that this is due to the smaller

audience in attendance at sporting events at these levels compared to the Division I-A schools.

Outsourced marketing properties also indicated no desire to get involved in the outsourced

marketing efforts of high school athletics.

54. Level of Intercollegiate Athletics Outsourced Marketing is Best Suited For 27 Division I-A Schools 17 Division I-A Conferences 9 Division I-AA Schools 4 Division I-AA Conferences 3 Division I-AAA Schools 1 Division I-AAA Conferences 1 Division II Schools 0 Division II Conferences 0 Division III Schools 0 Division III Conferences 1 NAIA Schools 0 NAIA Conferences Other

1 Case by case by school, location, ultimately the guarantee

55. Would You Be Interested in an Outsourced Partnership with High School Athletics? 2 Yes 24 No

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Level of Satisfaction, Renewal Interest and Familiarity

Most outsourced marketing properties were highly satisfied with the school it was

representing and expressed a strong interest in renewing their contact when it came up for

renewal. However, surprisingly 64% of the respondents indicated a moderate to low familiarity

of other outsourced marketing deals around the country within intercollegiate athletics.

56. Your Company's Level of Satisfaction With the School it Represents 23 High 4 Moderate 1 Low

57. Your Company's Current Interest in Renewal 25 Highest 1 High 1 Moderate 0 Low 0 Lowest

58. Your Company's Familiarity with Other School's Outsourced Marketing Contracts 9 High 13 Moderate 5 Low 0 No

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CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

The purpose of this study is to examine outsourced marketing in Division I intercollegiate

athletics from the outsourced marketing companies’ perspective. An analysis of the respondents’

answers can help improve future outsourced relationships with institutions of higher education,

while also addressing areas of concern that may need future consideration within the context of

higher education.

The primary goal of outsourced marketing companies (see chart 14) is to act as an

extension of an institution’s athletic department in a purely sales capacity. This is consistent

with the literature review and past research by the author. The outsourced marketing companies

pride themselves on their ability to generate a significant financial return on investment for the

athletic department through the development of sponsorships or partnerships with corporate

partners though surprisingly many respondents are not familiar with the outsourced marketing

contracts of their rivals and peers (see chart 58). Some schools offer additional benefits that

extend beyond revenue generation (see chart 52) but this is not the case on a consistent basis.

Further research could examine whether parent companies have a better understanding of their

competitors’ deals as it is speculated that general managers, who are an extension of the parent

company assigned to work at a property affiliated with one school, merely focus on meeting the

sales guaranteed and generating additional revenue.

In the respondents’ eyes, outsourced marketing partnerships often include creative

inventory and are up to speed with current marketing trends in sports (see chart 18 and 19). The

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corporate partners approached by outsourced companies through the properties can include

internationally recognized companies such as Coca Cola or UPS or it may be a locally owned

business wanting to associate with the local team and gain advertising exposure.

The strengths of outsourced marketing companies are their ability to generate revenue for

athletic departments on an annual basis (see chart 50). This does not come without a price

though as outsourced companies are going to sell the sports that provide sponsors the greatest

return on investment in their advertising efforts. For most schools, these sports are football and

men’s basketball (see chart 40). Women’s basketball may be packaged in with men’s basketball

in a sponsorship deal, but that is not a given. All other sports are frequently ignored in the sales

effort by outsourced company (see charts 42 & 51). This should not be interpreted as a dislike of

these sports, but rather as a financial decision by corporate sponsors. A State Farm or Cingular

corporate sponsor has the ability to reach many more fans at a football game then at a tennis

match due to the larger attendance of patrons at the football game (see charts 41 & 43). Such a

sponsor also has the capability to advertise to a broader audience on the radio and television as

well via the broadcast of football and men’s basketball games.

Even though this is an area of concern between athletic administrators and outsourced

marketing companies, most schools’ administrators understand the financial implication if an

outsourced marketing focused too much time on selling sponsorships for a softball game instead

of football or men’s basketball. The financial guarantee would not be met by the outsourced

company and their services would not be retained. It is a balancing act by the outsourced

marketing companies and many companies have offered to package Olympic Sports or women’s

athletics with football and men’s basketball sponsorship provided that the corporate sponsor did

not object. Outsourced companies indicate a desire to not force sports on a corporate sponsor if

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the sponsor was not interested (see chart 45 & 47). Most schools and outsourced marketing

companies can address these issues on a continuous basis via personal communication.

However, some schools like a Georgia, Texas or Stanford may need to explicitly state in their

contract with an outsourced company that Olympic Sports and women’s athletics must be sold,

given the high status of such programs at these schools.

While outsourced marketing has proven to be financially rewarding and has a low risk of

financial failure (see charts 15, 16 & 17), it is not for everyone. Outsourced marketing

companies will typically work where there is any opportunity to generate revenue. That greatest

opportunity can be found at the Division I-A level of which there are 117 schools. These schools

all have football programs. There are some Division I schools without football or with football

programs competing at a lower level (ex. Georgetown University), but then the decision of

whether to outsource depends on the capability of another sport, namely men’s basketball, to

carry the financial load with regards to attracting corporate sponsorships. Even though many

outsourced companies have a good idea of what schools work well with their sales efforts, there

are still additional issues to address.

While many outsourced marketing companies indicated a high level of satisfaction (see

chart 56) in their relationship with their academic institution and an interest in renewing their

deal (see chart 57), there are some concerns looming for the future. The greatest concerns from

the outsourced marketing companies’ perspective are financially-related. Companies indicate a

concern of the financial guarantees to the schools growing too large (see chart 53). Companies

may have to promise athletic departments more than they are capable of delivering as the fair

market value of deals increase due to deals like the one between Kentucky and Host

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Communications. This is an anxiety as operational expenses increase annually (see chart 39) and

the market becomes more and more saturated with sponsorships.

Another concern is that in working with corporate sponsors, outsourced marketing

companies need to find improved ways to demonstrate a return on investment for the sponsorship

(see chart 53). Evaluating these sponsor relationships is difficult for many outsourced companies

and is another area that needs improvement for the future. Part of the problem may stem from

the fact that outsourced marketing companies do experience turnover in their sales personnel.

Another part of the problem may stem from the fact that outsourced marketing companies are

approaching a limited number of sponsorship categories in their sales efforts (see chart 22).

There are many sponsorship categories typically sold in professional athletics or alternative

sports like the X-Games, but that are ignored in intercollegiate athletics. Future research is

needed to address why this is the case. Is the sponsorship not a good fit for the college setting?

Are outsourced companies just not familiar with the new sponsorship categories that they could

fill? Have companies tried approaching these categories and failed in their sales efforts? Or are

companies aware that a greater financial return can be found with select categories relative to

others? Additional research in this area is warranted.

In addition to outsourced marketing companies successfully filling a limited range of

sponsorship categories, it appears that the inventory provided by the athletic department and sold

by the outsourced marketing company is stagnant (see chart 20). As professional sports are

quick to sell more creative inventory including corporate hospitality, ribbon stripe advertising in

arenas and more fan friendly internet websites, institutions of higher educations, athletic

departments and outsourced marketing companies appear to do business as they have conducted

it in years past as found by the author in 2000. In bundling a sponsorship package, most

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outsourced companies push permanent signage at an athletic facility or a commercial during a

radio broadcast. The package might also include a simple ad in the game program. While those

inventories are fairly low maintenance to the outsourced company, gauging the return on

investment for the corporate sponsor is indeed a difficult task.

Outsourced marketing companies would be advised to broaden their inventory offerings.

Corporate hospitality, ribbon stripe advertising and videoboard messages offer more engaging

advertising opportunities for the corporate sponsor. While an outsourced company may

complain of the increased costs of such inventory, this can be offset in two ways. First, in

corporate hospitality, adding companies such as Outback Steakhouse and a beverage supplier

(Coca Cola or an alcohol distributor) can be beneficial as they can provide food, drinks and labor

to the corporate hospitality as part of their sponsorship package. Outback may receive

videoboard advertising at the game, but instead of providing straight cash to the outsourced

company, they offer their product for the corporate hospitality village as trade. This investment

enables other corporate sponsors to enjoy the “VIP” hospitality village with their guests prior to

a football or basketball game while Outback enjoys prime product placement and extends their

advertising message in a new fashion to the high-scale audience in attendance.

Second, for outsourced companies and athletic departments who prefer the permanent

signage route over the ribbon advertising or videoboard, they are leaving money on the table.

The ribbon advertising and videoboard messages garner greater fan interest and can be sold at a

higher rate to corporate sponsors. It is still difficult to measure the return on investment, but

creativity in the production aspect can help provide a better gauge for the sponsor. For example,

if Georgia were to provide a Valvoline Oil car race on their videoboard between their mascots,

fans cheering in response to who wins the race would indicate the fans’ interest in the videoboard

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production. It is still difficult to quantify the fans’ awareness of Valvoline Oil, but is much

better than a permanent sign that blends in to most fans on gamedays. While ribbon stripe

advertising may be too expensive for all schools to add to their facilities at this time, there are

additional business options that outsourced marketing companies would like to acquire for the

future (see chart 21). This can provide a wide range of future research opportunities.

Many outsourced companies would like to control the credit card affinity program,

pouring rights for the institution, naming rights for facilities, apparel or retail options and

licensing efforts. All of these are financially rewarding opportunities but are really already

limited or tied in to another business partner on campus as examined in the literature review. For

example, the credit card affinity program is typically tied in with the alumni relations office at

many schools and may work directly with licensing. This collaborative effort can help to garner

the school a percentage return on every purchase made by an alumnus or supporter who carries a

credit card bearing that school’s logo.

Pouring rights consists of more than just the pouring rights of concession stands at

athletic facilities as there are vending machines in dorms and around campus to account for as

well as the pouring rights that exist within the dining halls. The institution or dining services

may control those rights with money going directly back to the school and not just the athletic

department.

Facility naming rights is a topic of significant research opportunity for the future as

professional athletic venues typically work on a limited term naming rights deal. This enables

the facility to earn an annual income off the naming rights deal with a corporate partner and an

income that increases with time due to escalator clauses. On the college campus, many naming

rights are tied to people who have made a significant contribution to the school either financially

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or academically. Naming a facility after a former president or coach generates limited revenue,

while naming a facility after a donor frequently generates a one-time gift to offset initial

construction efforts. There is no annual income for the school nor is the opportunity available to

rename the facility down the road. This is a persistent problem around campuses as facilities are

being named without regards to what will happen in the future when there is nothing left to

name. For those few schools that have copied professional sporting arenas with an athletic

facility with a naming rights deal from a Taco Bell (Boise State University), Papa John’s

(University of Louisville), or Movie Gallery (Troy University) they have come under criticism

about the naming rights disrupting the higher education philosophy with excess commercialism

being the primary concern. However, consistent with the literature review, look for more

outsourced marketing companies to explore the naming rights avenue in future years.

Licensing and retail stores or apparel opportunities are other inventory options desired by

outsourced marketing companies, but the Collegiate Licensing Company truly has a monopoly

on the licensing efforts of Division I-A schools. While they could stand to use some

competition, there is a limited amount of financial return generated from licensing efforts in the

sense that fans determine the financial return based on their purchases. If a school has a

championship season, royalties to the school may be greater than in previous years. If a school

changes a logo, there might be an initial increase in sales. But with licensing, there is not the

opportunity to create your own return on investment as found in outsourced marketing.

Retailing and apparel provide the same fear as outsourced marketing have indicated a

desire to keep expenses down and revenue up. This does not bode well in retailing as there is

constant change in the market of what is selling and what is not. It is a unique niche and with

outsourced efforts already existing in campus bookstores, like a Follett’s, institutions of higher

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education have already turned to this area as their own revenue source. This is separate from

athletic departments even though most on-campus bookstores will sell jerseys and athletic

memorabilia to fans.

From a financial return aspect, what is interesting is that the research indicated that

outsourced marketing companies do not have a desire to control all marketing aspects of sports

on a college campus. One would think that packaging varsity sports with club sports and

intramurals would lead to broader exposure for corporate sponsors thereby earning the

outsourced marketing company a greater financial return. This proves not to be the case.

Research needs to be done to discern whether this is due to a lower value placed on club sports

and intramurals by corporate sponsors, a lack of manpower to activate such sponsorships in

recreational facilities or confusion regarding the split of financial guarantee to varsity athletics

and recreational sports. Along a similar line, outsourced marketing companies did not express a

desire to work with high school athletics on their sales efforts (see chart 55). Though the

literature provided a glimpse into why marketing high school athletics occurs periodically,

additional research would be useful in this area to more thoroughly examine the issue.

If an outsourced marketing company did choose to work with high school athletics on

their sales efforts, one category that would likely be severely restricted would be sponsorships

with alcohol companies. That is not the case at the college level as many outsourced companies

do have existing relationships with alcohol sponsors (see chart 24). Such sponsorships are

typically limited by the school and athletic department (see chart 26) and are often presented in a

subtle fashion to fans through a radio commercial or a simple ad in the game program. Signage,

videoboard advertising and gameday promotions by alcohol sponsors are typically limited even

if it means reduced earnings from the sponsorship.

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While lottery or casino sponsorships are also restricted by athletic departments (see chart

30) due to concerns of gambling in college sports, signage is more permissible in the sponsorship

package, along with radio commercials (see chart 28). However, casinos and internet gambling

sites are not found to be involved in gambling sponsorships to the same capacity of state-

supported lotteries (see chart 29). The research indicated that state-supported lotteries are much

more frequent sponsors of intercollegiate athletic events. Furthermore, lifting restrictions on

alcohol and gambling sponsorships would generate additional revenue, but more so for alcohol

sponsorships (see charts 27 & 31)

Gambling may be found on college campuses illegally (point shaving, fixing games) or

legally (lottery sponsorships), but one area that outsourced companies need to avoid gambling on

for the future is whether Title IX impacts them. The courts have not decided if outsourced

marketing companies, as extensions of institutions of higher education, are obligated to follow

Title IX standards. Presently, outsourced marketing companies discern that they simply generate

the revenue for athletic departments (see chart 44). How the departments spend it should fall

under Title IX guidelines, not the sales approach. As noted earlier, outsourced companies have

demonstrated willingness to package women’s athletics with football or men’s basketball (see

chart 46). However, the companies did not want to force it upon corporate sponsors (see charts

45 & 47). The sponsors are simply looking at the relationship from a business perspective and

look to reap the great financial return on investment in their advertising efforts (see charts 48 &

49).

That noted, where pro-active moves could take place to be considerate of Title IX and the

advancement of opportunities for females would be in the make-up of the sales staff. Outsourced

marketing companies have demonstrated that females and minorities do not play a significant

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role in the sales efforts for the companies (see charts 6 & 7 relative to chart 5). In fact, women

tend to play a greater role in the non-sales efforts which can range from secretarial duties to

activating sponsorships at the event, neither of which involve significant sales responsibilities

(see chart 9 relative to chart 8). Because personal selling or face-to-face sales (see chart 13) is

the primary means of soliciting sponsorships, future research should examine whether this is a

factor in limiting female and minority involvement in sales responsibilities. Minorities of race

and ethnicity have little involvement in outsourced marketing as a whole and given higher

education’s efforts for greater diversity on college campuses, should the same not be expected of

an extension of the institute of higher education? This is especially true when many outsourced

properties employ staff members that have previously worked at institutions of higher education

(see chart 4) and have experienced higher education’s mission and philosophy.

Future research can also examine outsourced marketing properties and their relationships

with private and public schools. Limited responses (see charts 35 – 38) make reaching a

conclusion of which type of school is easier to work with very difficult. However, initial

responses did offer a framework to start from for future research efforts. It is safe to conclude

though that outsourced marketing companies will partner with entities that offer the greatest

financial return on investments. These schools and conferences are more common at the

Division I level (see chart 54) relative to lower levels of intercollegiate athletics. This is

consistent with Tomasini’s (2004) findings that Division I-A athletics provides sponsors the

greatest opportunity to meet their goals.

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Complimenting Literature

Steinbach (2005b) stresses that corporate sponsorships in intercollegiate athletics must be

clean in order to be effective. Too much clutter can do a disservice to the corporate sponsor. It

can also do a disservice to the institution of higher education that is trying to promote a mission

of higher education. Athletic directors desire the revenue that can be generated from

sponsorships and promised by outsourced marketing companies (Lehnus & Miller, 1996), but it

must be done effectively. Dietz and Enchelmayer (2001) stress the need for any outsourced

relationship on a college campus to be a partnership between the entities involved. They also

stress that the fear of losing control is normal in outsourced relationships.

That noted, that does not mean that outsourced companies should have their way.

VanHorn-Grassmeyer and Stoner (2001) indicate that strong leadership is a must when

outsourcing in higher education. Outsourcing can enhance revenue, increase efficiency and

decrease costs, but leaders in higher education, namely athletic directors and presidents, must

retain control and not be bullied. Such leaders in higher education can spell out detailed

contracts for outsourced marketing partners that enable the school to remain in the driver’s seat

throughout the length of the contract (VanHorn-Grassmeyer & Stoner, 2001).

Moore (2002) notes that in initiating such relationship, exploring all options is a must.

Learning the mistakes of your peers is also advocated by Moore as such mistakes can frequently

lead to protests and problems on the campus itself. Bruno (2005) notes that contacting peers

even before the RFP process has started can eliminate errors. Such contact enables the

institution to generate a listing of guidelines and expectations that must be met, while also

enabling for more monitoring, communication and evaluations during the duration of the

relationship.

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Evaluations are vital as it enables the involved parties to be in line with the institution’s

mission, establish the goals and objectives in quantitative fashion, and take the outsourcing

relationship to new heights relative to competitors (Moneta & Dillion, 2001). Through these

evaluations and communication, Moneta and Dillion (2001) argue that innovation and

sustainability can become strengths of a relationship over the long haul. And if such is not the

case, the contract can specifically cover termination clauses relative to the scope of services

provided. Presidents and athletic directors simply cannot forget that what they are turning over

to outsourced companies is unique and should be leveraged for maximum value and control by

the institution of higher education (Moneta & Dillion, 2001)

Direct Practical Recommendations

Given the lack of research in outsourced marketing in intercollegiate athletics, the

aforementioned research on outsourcing in higher education is important to consider when

deciding whether to outsource sports marketing efforts. In examining the findings of this

research and turning it into practical applications for presidents, athletic directors and general

managers of outsourced marketing companies, I would also suggest the following

recommendations for improving the business relationship and being pro-active in addressing

future issues in outsourced sports marketing within the context of higher education:

1. Given the financial impact of an outsourced marketing relationship and its ability to impact the educational mission and philosophy of institutions of higher education, greater presidential control is advocated in the solicitation, initiation, activation and monitoring of outsourced marketing relationships with athletic departments.

2. Despite a history of a reduced return on investment, outsourced marketing

companies should strongly encourage corporate sponsors to package an Olympic Sport with football or men’s basketball in sponsorship deals for the betterment

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of the overall athletic department. This would also fall in line with the institution of higher education’s overall philosophy of equal opportunity.

3. Outsourced marketing companies should offer their consulting services in the

area of marketing and sales to “smaller” schools that would not otherwise be financially attractive to partner with for an extended relationship. Their sales expertise would be considered invaluable to a smaller school and could be an extended service provided by outsourced companies collectively.

4. Controlling the growth of future financial guarantees is hard to do, but for the

benefit of the health and longevity of the outsourced marketing option, schools should look into greater revenue sharing options with a reduced guarantee upfront.

5. Outsourced marketing companies are going to have to address the issue of

providing an analysis of return on investment to their corporate partners and evaluating such relationships on a regular basis. With many schools having sport management programs, outsourced marketing companies should work with these professors on simple research projects that could determine brand awareness or fan familiarity of the corporate sponsor at sporting events. Sport management programs can also provide students for internships and work experiences for the outsourced company and could be the recipient of grants or scholarships for their services rendered. In maintaining the educational philosophy of an institution of higher education, outsourced marketing companies could provide symposiums on sales techniques and sponsorships in intercollegiate athletics to the students in an education setting. Students could in turn assist recreational sports, club sports and intramurals in their sales efforts of local sponsorships. They could also work with area high schools in sponsorship generation. Sport management programs could be a grassroots outsourced marketing company for their campus sports and surrounding secondary schools.

6. Outsourced marketing companies must explore new categories in their sales

efforts as today’s sponsors simply have more places to spend their advertising dollars. Without a clearly defined return on investment, long term corporate partners may consider advertising elsewhere. Before this occurs, outsourced companies need to evolve and consider alternative sponsorship categories that have been largely ignored in intercollegiate athletics.

7. In similar fashion, outsourced marketing companies need to continue to expand

their inventory options in collaboration with the athletic department. As more options arise for corporate partners to spend their advertising dollars elsewhere, outsourced marketing companies need to be pro-active in offering new and exciting inventory and not remain stuck in the status quo option of radio commercials and permanent signage.

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8. Along those lines, athletic departments who think they might not be able to afford new inventory items, particularly videoboards and ribbon advertising, need to consider the option of letting an outsourced marketing company buy or finance the technology as they can earn a greater financial return on investment from the corporate partners with new capabilities.

9. Outsourced marketing companies have an extensive list of business options they

would like to acquire such as credit card affinity, pouring rights, licensing, and apparel or retail options. These revenue streams are already fairly well locked in by the institution of higher education and outside parties, both of whom will likely not turn over the revenue sources to the outsourced marketing company.

10. Where outsourced marketing companies should focus their attention is in the

direction of naming rights opportunities. As more schools start to accept the idea of having an athletic facility named for a corporate partner or business, the outsourced marketing companies could provide the consulting services and expertise to insure the school is getting the best deal possible.

11. As the issue of binge drinking on college campuses is not likely to disappear,

outsourced marketing companies and athletic departments, in collaboration with the school, should embrace the problem at hand and do their part to encourage responsible drinking. Rather than rely on radio commercials and an ad in the game program, utilize videoboards at sporting events to air a public service announcement. The PSA could be voiced by a former or even current star athlete or coach and could advocate knowing when to say when, turning the keys over to a designated driver, catching a cab instead of driving under the influence, and respecting the legal drinking age. The overall theme would entail drinking responsibility and keeping the gameday festivities safe for everyone. The message could be presented in conjunction with your alcohol sponsor thereby opening up the opportunity for a greater financial return on the sponsorship as their inventory and overall sponsorship package expands.

12. Outsourced marketing companies and athletic departments should also not be

afraid to maintain a sponsorship with a state-supported lottery. This is especially true if money from the lottery is going back to help education within the state. Like the alcohol messages though, advertising with such corporate partners should advocate responsible participation.

13. Videoboard features and radio/TV commercials should not focus entirely on

corporate partners as those are commercials that are frequently disregarded. Instead, outsourced marketing companies should encourage corporate partners to do educational and interesting features about the institution of higher education. This could include an “inside look at the business school” or a segment that examines what type of research is taking places with the science departments. Features could explore the school ranks in academic rankings or with the incoming freshmen class as these features are more likely to be received

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by fans and can easily include corporate partner advertising messages in a subtle manner.

14. In the second recommendation, it was suggested that sponsorship deals should

package a football or men’s basketball with an Olympic Sport. Out of deference for federal legislation known as Title IX, outsourced marketing companies could also package women’s athletic programs with revenue sports in sponsorship packages. An emphasis on the development of future female leaders through varsity sports participation could be tied in rather than just observing the sponsorship as an advertising option. This would also fall in line with the institution of higher education’s overall philosophy of promoting equal opportunity.

15. Finally, in signing a contract with an outsourced marketing company, each

athletic director or president should include an internship role with the outsourced marketing company that would be filled with a deserving female or minority student-athlete. If none is available, the stipulation should be such that the next preference would be given to a deserving female or minority member of the school’s student body. Comparable to the ESPN Diversity Initiative program, placing a female or minority in the internship role is the first step to diversity. Once a student starts as an intern, they could then be promoted to an account executive, then an assistant general manager. It may require that they jump from school to school like current interns who are promoted in outsourced companies, but eventually you will see greater numbers of females and minorities in sales responsibilities and eventually advancing to become general managers of outsourced marketing companies.

While the arms race in intercollegiate athletics continues to press on and excessive

spending in intercollegiate is being criticized by detractors such as the Knight Commission

(Wills, 2005), one would think that investing all of this money into athletic facilities and salaries

would result in greater success on the playing field thereby leading alumni to donate more

money back to the school. Robert H. Frank, a management and economics professor at Cornell

University, found this not to be the case in his study last year (Burris, 2004). As administrators

in higher education begin to accept this research as truth, Myles Brand, head of the NCAA,

insists that not all external involvement with intercollegiate athletics is bad be it from alumni,

supporters or corporate partners.

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Brand (2005) stresses that how you utilize the money contributed is of the greatest

importance. He stresses that intercollegiate athletics focuses on opportunities for student-athletes

namely in the means of scholarships and a quality education. It is not profit-driven like

professional sports and owners of the teams. And funding for these scholarships and athletic

department operating budgets can derive from corporate partnerships. The key is maintaining a

clean fit for the corporate sponsor on the school itself and not just in the athletic setting (Krisel,

2005). The American Association of University Professors (2002) recently indicated that

stopping commercialization is sports is not the concern, but rather the issue is to make sure the

commercial involvement is consistent with the school’s educational mission. Outsourced

marketing companies can play a vital role in these efforts.

An example of this saw the University of Southern California realizing that selling

alcohol at sporting events for the 2005 and future athletic seasons crossed the line of external

involvement due to continued poor behavior of drunken fans (Klein, 2005). Though the move

may cost the school hundreds of thousands of dollars in revenue, it is about the philosophy of

alcohol sales not fitting in with the culture of the university that took precedence, not revenue.

Each school is going to have to assess its own situation, but where corporate involvement

can go too far was demonstrated this spring when the University of Arizona’s athletic

department, in conjunction with the school, permitted a local car dealership who was a corporate

sponsor to sell cars on the campus thereby turning the school into a new cars sales lot

(McDonnell, 2005). A more appropriate sponsorship package might have resembled the

“Pontiac Game Changing Performance” presented by the NCAA during the 2005 Men’s

Basketball Tournament. The sponsorship enabled fans to vote for their favorite plays during the

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tournament with the winning school earning funding for their general scholarship fund (Foley,

2005).

Commercialization is not a bad thing as it occurs all over campus and it frequently comes

with initial resistance. Such is the case at the University of Indiana when a new scoreboard and

signage at historic Assembly Hall, home of the basketball programs, will be in place this

basketball season (Warden, 2005). Fans and faculty may not initially like the addition

sponsorships, but it does offset the budget for the athletic department without relying too heavily

on the university for financial support. As faculty groups arise around the country, namely at

Pac Ten and Big Ten schools, to denounce athletics’ place on campus (Suggs, 2001a & Suggs,

2001b) it is important to realize that the excessive spending in big-time intercollegiate athletics is

the problem and not necessarily the commercialization as that is occurring everywhere on

campus.

Presidents and leaders at institutions of higher education must continue to make sure

episodes comparable to that at the University of Arizona do not occur, but at the same time, try

to educate detractors of intercollegiate athletics on the importance of an athletic department

being financially self-sufficient (Todd Jr., 2005). If this is the case, more university funding can

be spent on higher education and in line with the overall philosophy and mission of the schools.

This is especially true in cases where state financial support is dwindling.

Sports can still be a positive opportunity to promote the university as demonstrated by

recent examples by larger schools earlier this year. The University of North Carolina, after

winning the men’s national basketball championship this spring, ran an ad in the Washington

Post the next morning that featured a North Carolina basketball jersey with the number 38 on it

(Stancill, 2005). The number represented the number of Rhodes Scholars the highly regarded

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academic institution has produced. In similar fashion, Kentucky Athletics uses its relationship

with CHA Health to sponsor a program that spotlights top high school sophomores in the state

(Todd Jr., 2005). The program is geared to direct those top students to Lexington for college

after completing high school. It also helps the athletic department stress academic and

leadership in a state-wide message. Kentucky is also exploring the idea of tying athletic

supporters into greater academic contributions, while also asking coaches and athletic

administrators to speak on behalf of academic contributions (Todd Jr., 2005). Their outsourcing

relationship with Host Communications is a model other schools should emulate.

In examining outsourced marketing companies and their relationship to colleges and

universities around the nation, it is this type of evolutionary and creative thinking that needs to

occur more frequently. If the outsourced marketing company continues to think from the

mindset of the institution of higher education and not purely as a sales group, future relationships

will continue to prosper. It is when outsourced marketing companies lose that train of thought

that problems start to arise. Ideally, greater communication between the school, the athletic

department and the outsourced marketing company will enable future relationships to create a

“win-win” situation for all parities involved and will extend over to better benefit the corporate

partners as well for the duration of the partnership.

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APPENDIX A

COVER LETTER

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April 16, 2005

Dear General Manager, Please find an enclosed survey that aims to examine one of intercollegiate athletics’ growing trends: outsourced marketing. A fall pilot study for my dissertation examined athletic directors and senior administrators’ perspective towards outsourced marketing in higher education. (I will be happy to e-mail those results to you if so desired.) Now the tables are turned and the outsourced marketing companies have the opportunity to provide their views for my dissertation research. Your responses could potentially open new inventory options or reduce future restrictions on select corporate partners. It also gives the schools a chance to hear your collective voices. The enclosed survey is one that has been originated by myself but then modified with the help of anonymous outsourced account executives from Host Communications and ISP Sports to insure a peer reviewed questionnaire without bias and one that addresses the issues of importance within outsourced marketing in intercollegiate athletics. I would like to ask you or someone on your staff to take a few minutes to answer the enclosed questionnaire in regards to your company’s approach to marketing. Each company’s specific responses are strictly confidential, but the results collectively will help to provide a report looking at the outsourced marketing relationships of today’s major athletic departments around the country. The collective results are also available to you via e-mail should you request them. Your thoroughness in answering will help provide you and your colleagues with the most comprehensive look to date at the growing use of outsourced marketing. Ideally, future relationships with institutions of higher education will only be strengthened as a result of this study. Should you choose to complete the survey, please take a moment to fill out the enclosed consent forms and be sure to include your name and e-mail address should you want a copy of the final results. All questionnaires may be returned in the enclosed self-addressed, stamped envelope and must be returned no later than May 2nd. Thank you for your cooperation and time in this matter, and please do not hesitate to contact me with any questions. Have a wonderful spring semester. Sincerely, Rob Zullo Doctoral Candidate University of Georgia 706-542-9694 Zullo@sports.uga.edu

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APPENDIX B

CONSENT FORM

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THE UNIVERSITY OF GEORGIA DEPARTMENT OF PHYSICAL EDUCATION AND SPORT STUDIES CONSENT FORM TO ACT AS A HUMAN SUBJECT Title of Project: A Study of Outsourced Marketing at Division I-A National Collegiate Athletic Association Schools Investigator’s Name: Robert Zullo E-mail: Zullo@sports.uga.edu Phone: 706-542-9694 Faculty Advisor: Dr. Billy Hawkins E-mail: bhawk@uga.eduPhone: 706-542-4427

The Questionnaire you will complete is part of a doctoral research project conducted by Robert Zullo under the supervision of Dr. Billy Hawkins, Department of Physical Education and Sport Studies, designed to study the outsourced marketing groups at major Division I-A National Collegiate Athletic Association schools. You will be asked to answer questions pertaining to your outsourced marketing company and your company’s relationship with the institution of higher education that you represent. By signing below, you agree to allow Robert Zullo to use the information you provide in presentations or publications in which individuals and their companies will in no way be identified. Collectively, the information will provide those in outsourced marketing and intercollegiate athletic administrators a better understanding of the best use of outsourced marketing.

By participating in this research, you may indicate below if you wish to receive the collective results at the conclusion of the study. These will be mailed directly to you. While the identity of the respondents will still be protected in confidentiality, the collective results will enable you to be better educated on the issues regarding your future decisions towards outsourced marketing in college athletics. By signing below, you voluntarily agree to participate in the above study. You indicate you understand that any relationship between yourself and the information you contribute to this study will be kept confidential. It will take 5-10 minutes to complete the questionnaire. You should not encounter any risk or experience any discomfort as a result of participation. You may terminate participation in this study at any time without prejudice to yourself or any personal matter. Please sign both consent forms and return one of them with the completed questionnaire in the self-addressed envelope provided. Any questions may be directed to Robert Zullo at any time via the phone number or e-mail address listed above. Please note that there will be a follow-up mailing to participants who do not respond. If you mail back a blank questionnaire, this will indicate a desire not to be contacted again. Print Subject’s Name Subject’s Signature Date Investigator – Robert Zullo Date If you would like a copy of the results, please list your e-mail address in the spaces provided below. Please sign both copies, keep one and return one to the researcher with the completed questionnaire

in the self-addressed stamped envelope. If the envelope is lost, return consent form and questionnaire to: Robert Zullo 355 Jennings Mill Pkwy, #1432

Athens, GA 30606 Additional questions or problems regarding your rights as a research participant should be addressed to: The Chairperson, IRB, Human Subjects Office, University of Georgia, 612 Boyd Graduate Studies Research Center, Athens, Georgia 30602-7411 Telephone (706) 542-3199; E-Mail Address IRB@uga.edu

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APPENDIX C

QUESTIONNAIRE

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MARKETING QUESTIONNAIRE

This study is designed to provide a comprehensive examination of the marketing and promotions of outsourced marketing groups affiliated with NCAA Division I-A schools. Please note that account executives at three non-BCS schools’ outsourced companies assisted in the development and evaluation of this questionnaire. Complete your questionnaire and return it, along with a signed copy of the consent form, in the enclosed addressed, postage-paid envelope. Please DO NOT put your name or the name of your institution on the survey to ensure confidentiality of your responses. Section I.

1. Please check your job title or position in the outsourced marketing group. ____ General Manager (or similar, please list)

_________________________ ____ Assistant General Manager (or similar, please list)

_________________________ ____ Account Executive ____ Other

2. Please check the name of your outsourced company.

____ Action Sports Media ____ Clear Channel ____ ESPN Regional ____ Host Communications ____ ISP

____ Learfield ____ Nelligan ____ Viacom ____ Other ____________________

3. Please check the athletic conference of the institution your company

represents. ____ ACC ____ Big East ____ Big Ten ____ Big Twelve

____ Pac Ten ____ SEC ____ Independent ____ Other ____________________

4. Please indicate the number of individuals on your staff that have worked for a

NCAA member institution’s athletic department or an athletic conference. ______

5. Please indicate the size of your immediate office sales staff (those actively

pursuing sponsors, partners or clients). ______ a. How many of those in active in sales are female? ______ b. How many of those in active in sales are minorities? ______

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6. Please indicate the size of your immediate office staff with non-sales duties (those not actively pursuing sponsors, partners or clients). ______

a. How many of those staff members are female? ______ b. How many of those staff members are minorities? ______

7. Does your parent company have a demonstrated history of advancement for females and minorities? If yes, please expand on the history.

____ No ____ Yes – expand in the space below

8. Please rank from 1 to 5 with 1 being your company’s best method of soliciting

sponsors/partners/clients. ____ Personal selling ____ Database ____ Direct mail ____ Telemarketing ____ Other

Section II

1. Please rank the primary goals of outsourced marketing with 1 being the greatest primary goal and 7 being the lowest.

____ Additional revenue ____ Guaranteed revenue ____ Match or better observed success at other schools ____ To enhance marketing and promotions ____ To increase ticket sales ____ To increase awareness of school’s athletic department ____ Other

2. How many years overall have you worked with your school as an outsourced

partner? ______

3. In the duration of your presently existing contract with your school, how many years since the deal first originated have you successfully met your annual guarantee mark? ______

4. In the duration of your presently existing contract with your school, how

many years since the deal first originated have you failed to meet your annual guarantee mark? ______

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5. How would you rank your company with regards to its ability to piece together creative inventory for its sponsors/partners/clients?

____ High level of satisfaction ____ Moderate level of satisfaction ____ Low level of satisfaction

6. How would you rank your company with regards to its ability to stay

knowledgeable with the marketing trends of other entities in sports including elsewhere in college athletics and at the professional level?

____ High level of satisfaction ____ Moderate level of satisfaction ____ Low level of satisfaction

7. Please rank the best selling inventory items that your contract with your

specific school permits you to sell to sponsors/partners/clients with 1 being the highest score and 17 being the lowest score. If needed, mark NA where an inventory item is not applicable and adjust your rankings according.

____ Radio Broadcast of Games ____ Coaches Radio Show ____ Coaches Television Show ____ Internet ____ Signage (including field or playing surface and arena or

facility) ____ Video Board or Ribbon Advertising ____ Print Media (including Game Programs, Ticket backs,

Posters, Schedule Cards, Cups) ____ Game-day Promotions (including Half-time promotions,

Time-out promotions, Pre-game promotions, Souvenir giveaway)

____ Corporate Hospitality/Village ____ Interactive Marketing Area/Fan Zone ____ Real streaming or video via the Internet (PPV) ____ Concession and Pouring Rights ____ Licensing ____ Kids club ____ Naming rights for buildings ____ Naming rights for tournaments ____ Other

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8. Please check which inventory you would like to acquire and sell in future

contracts. ____ Concessions ____ Pouring Rights ____ Apparel ____ Licensing ____ Naming rights for buildings ____ GameDay Condos/Hotels ____ Real streaming or video via

the Internet (PPV) ____ Ticket sales ____ Premium seating ____ Premium parking ____ Tournament Management

____ Corporate Hospitality/Village ____ Interactive Marketing Area/Fan

Zone or Festival ____ Credit Card Affinity Program ____ Fan Reward Program ____ Rivalry Series Title Sponsorship ____ Chairbacks or seat cushions for

stadiums and arenas ____ Intramurals and club sports ____ Student Recreation or Activity

Center ____ Other

9. Please check which sponsor/partner/client categories you have successfully

filled within the last three years of your relationship with your present school. Please note that the listing continues on the next page.

____ Fast-food ____ Subs and Sandwiches ____ Other Restaurants

(sit - down) ____ Sports Bar ____ Coffee Shops/Houses ____ Pizza ____ Hotel ____ Soda or cola ____ Water ____ Juice ____ Banking ____ Investment Firm or

Financial Advisors ____ Credit Card ____ Credit Counseling/Debt

Consolidation ____ Tax Services ____ Phone Service ____ Cellular Service

Provider ____ Internet Service

Provider ____ Satellite Television ____ Video/DVD Rentals ____ Movie Theaters

____ Music Stores ____ Camera ____ Film ____ Batteries ____ Fuel/Gasoline ____ Motor Oil ____ Tires ____ Convenience Store ____ Automobile Brand ____ Automotive Repair ____ Car Dealership ____ Boats and Marine ____ Airlines ____ Train ____ Health Insurance ____ Car Insurance ____ Life Insurance ____ Hospital/Medical

Center ____ Drug Stores ____ Pharmaceutical ____ Real Estate ____ Power Supplier ____ Hardware or Home

Improvement Store

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____ Tools or Power Equipment

____ Health and Fitness Clubs

____ Athletic Apparel ____ Athletic Equipment ____ Computer

Software/Hardware ____ Computer Brand ____ Computer Website

(Ex. Yahoo, Monster) ____ Video Games ____ Grocery Store ____ Dairy ____ Chocolate ____ Candy ____ Cereal ____ Coffee ____ Snacks/Potato Chips ____ Desserts ____ Men’s Health/Beauty

including shaving or deodorant

____ Women’s Health/Beauty including shaving or deodorant

____ Perfume/Cologne ____ Pain Reliever ____ Soap ____ Shopping Mall or

Department Stores ____ Clothing Line ____ Footwear Line ____ Retailer ____ Sporting Goods Store ____ Office Supply Store ____ Electronics Store ____ Children Toys Store ____ Delivery Services ____ Print Media ____ Television Media ____ Casino ____ Lottery ____ Philanthropy/Community Service ____ Military

____ Other ________________________ ____ Other ________________________ ____ Other ________________________

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10. Do you foresee any of these categories playing a greater role in your future sales efforts then they typically have in the past? If so, which ones?

11. In what fashion, if any, do you have a partnership with an alcohol

sponsor/partner/client? Please check all that apply. ____ No partnership ____ Radio Broadcast of Games ____ Coaches Radio Show ____ Coaches Television Show ____ Internet ____ Signage (including field or playing surface and arena or

facility) ____ Video Board or Ribbon Advertising ____ Print Media (including Game Programs, Ticket backs,

Posters, Schedule Cards, Cups) ____ Game-day Promotions (including Half-time promotions,

Time-out promotions, Pre-game promotions, Souvenir giveaway)

____ Concession and Pouring Rights ____ Naming rights for tournaments ____ Tickets and Hospitality ____ Other

12. Which alcohol company holds that corporate partnership with your company?

13. Are alcohol-related sponsorships/partnerships restricted by your school? ____ Yes ____ No

14. Would you increase sponsorship revenue if this restriction were lifted?

____ Significantly ____ Moderate ____ Not really

15. In what fashion, if any, do you have a partnership with a lottery or casino sponsor/partner/client? Please check all that apply.

____ No partnership ____ Radio Broadcast of Games ____ Coaches Radio Show ____ Coaches Television Show

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____ Internet ____ Signage (including field or playing surface and arena or

facility) ____ Video Board or Ribbon Advertising ____ Print Media (including Game Programs, Ticket backs,

Posters, Schedule Cards, Cups) ____ Game-day Promotions (including Half-time promotions,

Time-out promotions, Pre-game promotions, Souvenir giveaway)

____ Concession and Pouring Rights ____ Naming rights for tournaments ____ Tickets and Hospitality ____ Other

16. What type of partner is it?

____ State-supported lottery ____ Casino ____ Internet gambling ____ Other

17. Are lottery or casino-related sponsorships/partnerships restricted by your school?

____ Yes ____ No

18. Would you increase sponsorship revenue if this restriction were lifted?

____ Significantly ____ Moderate ____ Not really

19. Please cite which school(s) you think would be most advantageous to acquire

for outsourced marketing. 20. Please cite which school you believe has the best relationship with their

outsourced marketing company.

21. Please check your reaction to the new Host Communication – University of Kentucky partnership with regards to the financial structure.

____ Significantly surprised ____ Moderately surprised ____ Not really surprised

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22. Please check whether you feel it is easier to work with a public institution or a private institution of higher education when it comes to outsourced marketing relationships.

____ Public Institution ____ Private Institution

23. Why do you feel that is the case? 24. Please check areas where you would like to see your company reduce

expenses. ____ Guarantee to school ____ Printing costs (rate cards, brochures, mailers) ____ Office Space ____ Staff/personnel ____ Travel ____ Inventory Expenses ____ Corporate Hospitality ____ Tickets ____ Extending radio/TV network ____ Other

Section III

1. Please rank which three sports your outsourced marketing company sells the most inventory for with 1 being the highest score and 8 being the lowest. Please indicate NA for not applicable if you do not sell a particular sport and adjust your rankings accordingly.

____ Football ____ Men’s Basketball ____ Women’s Basketball ____ Baseball ____ Men’s Soccer ____ Women’s Soccer ____ Ice Hockey ____ Other

2. Please rank with 1 being the most prevalent and 4 being the least, the reasoning for selling sponsorships for these sports.

____ History Indicates Success in Sales ____ Sponsor/Partner/Client Demand ____ Greater Return on Investment ____ Other

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3. Please rank which three sports your outsourced marketing company sells the least inventory with 1 being the highest score and 12 being the lowest. Please indicate NA for not applicable if you do not sell a particular sport and adjust your rankings accordingly.

____ Field Hockey ____ Gymnastics ____ Golf ____ Lacrosse ____ Men’s Soccer ____ Women’s Soccer ____ Softball ____ Swimming ____ Tennis ____ Track and Field ____ Wrestling ____ Other

4. Please rank with 1 being the most prevalent and 4 being the least, the

reasoning for not selling sponsorships for these sports. ____ History Indicates Poor Sales ____ Lack of Sponsor/Partner/Client Demand ____ Least Return on Investment ____ Other

5. Please check your company’s awareness or concern for Title IX within

your sales approach and overall operations. ____ Very high concern ____ High concern ____ Moderate concern ____ Low concern ____ Very low concern

6. Should Title IX be an issue when your company is soliciting sponsors/partners/clients?

____ Yes ____ No ____ Case-by-case basis

7. Would you be willing to package your revenue-driving sports (football,

men’s basketball) with Olympic Sports and Women’s Athletics? ____ Yes ____ No ____ Case-by-case basis

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8. Would your corporate partners be receptive to such an idea? ____ Yes ____ No ____ Case-by-case basis

9. If no, why not?

10. What concerns and/or issues might a corporate partner have with packaging Olympic and women’s sports with traditional sponsorship packages?

11. What concerns and/or issues might an outsourced company have with packaging these sports with the revenue generating sports?”

Section IV

1. Please rank the major strengths of your outsourced marketing group with 1 being the highest attribute and 11 being the lowest. Mark NA where an answer is not applicable.

____ Service quality ____ Guaranteed revenue source ____ Additional funding beyond guarantee ____ Better public promotion of the athletic department ____ More modern advertising of the athletic department ____ Enhanced radio, television, or Internet maintenance ____ Well-rounded coverage of all of your sports ____ Help pay for scoreboard or capital investments ____ Less bureaucracy for athletic department ____ Good people ____ Other

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2. Please rank the major weaknesses of your outsourced marketing group with 1 being the highest attribute and 9 being the lowest. Mark NA where an answer is not applicable.

____ Lack of control over content ____ Poor communication with in-house marketing group ____ Inconsistency in marketing sales ____ Lack of promotion for Olympic Sports ____ Lack of interest for certain sports ____ Different goals than that of the athletic department ____ Sales conflicts with school history/traditions ____ Sales agreements conflicts with academic/faculty views ____ Other

3. Other than a focus on sales and revenue generation, are their other areas that your outsourced marketing company is beneficial to the institution it represents? Examples might include: charity work, promotional stipend, working with student groups, support of spirit teams (band, cheerleaders, dance teams), contributions to scholarship endowments or financial gifts to the university?

4. Please place a 1 by the biggest future problems with outsourced marketing

and then check all other potential problems. Please note that the responses carry onto the next page.

____ Too great of a guarantee for school ____ Frequent change in institution’s outsourced marketing

company ____ Turnover with sales personnel ____ Pooling several schools with one sponsor/partner/client ____ Lack of control over inventory ____ Lack of control over content ____ Time demand of sales ____ Variable pricing ____ Meeting the needs of Olympic Sports and Women’s

Athletics ____ Demonstrating return on investment for

sponsor/partner/client ____ Evaluating relationship with sponsor/partner/client ____ Different goals than that of the athletic department ____ Increased operational expenses ____ Ambush marketing ____ Helping academic mission ____ Contributing to scholarship funds

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____ Media inquiries or Open Records Act ____ Market cannot bear any more sponsorships ____ Big market, small market issues ____ Faculty concerns of overcommercialization ____ Other

5. In your opinion, check which level(s) of intercollegiate athletics

outsourced marketing is best suited to accommodate. ____ Division I-A schools ____ Division I-A conferences ____ Division I-AA schools ____ Division I-AA conferences ____ Division I-AAA schools (no football) ____ Division I-AAA conferences ____ Division II schools ____ Division II conferences ____ Division III schools ____ Division III conferences ____ NAIA schools ____ NAIA conferences ____ Other

6. Are you interested in an outsourced partnership with high school athletics?

____ Yes ____ No

Section V

1. Please check your current level of satisfaction with the school your company represents.

____ High level of satisfaction ____ Moderate level of satisfaction ____ Low level of satisfaction

2. Please check your current interest in renewal.

____ Highest level of interest ____ High level of interest ____ Moderate level of interest ____ Low level of interest ____ Lowest level of interest

3. If you choose not to renew, please state why.

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Section VI

1. Please check your familiarity with other schools’ outsourced marketing contracts.

____ High familiarity ____ Moderate familiarity ____ Low familiarity ____ No familiarity

2. Would you like to receive the results of this study? Check one below.

____ Yes ____ No

STOP!!! YOU HAVE ANSWERED ALL OF YOUR RESPECTIVE QUESTIONS.

THANK YOU FOR YOUR PARTICIPATION

Please return this questionnaire and one copy of a signed consent form in the enclosed addressed, postage-paid envelope. If you have misplaced the envelope, the return address is listed below. A copy of the results will be mailed to you, if you requested a copy.

Thank you very much for your assistance in this study.

COMPLETED SURVEYS AND ONE COPY OF THE SIGNED CONSENT FORM MAY BE RETURNED IN THE STAMPED SELF-ADDRESSED ENVELOPE TO:

Robert Zullo

355 Jennings Mill Parkway, #1432 Athens, Georgia 30606

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